Tokyo market outlook: AI-driven rally continues, SpaceX IPO draws attention

The Nikkei Stock Average rebounded sharply on the Tokyo Stock Exchange on the 29th, rising 1,636 yen from the previous day to 66,329 yen, marking the first time the index surpassed the 66,000 yen level. Trading value reached a record high of 16 trillion yen, partly due to the MSCI rebalancing.

Market attention was particularly drawn to electronic components stocks, centered on multilayer ceramic capacitors (MLCC), with Murata Manufacturing Co.,Ltd. <6981> temporarily hitting its daily limit up. MLCC is expected to see growing demand for data centers, and "the scope of speculative buying in data center-related special demand stocks is expanding," according to an analyst.

However, stock picking remains concentrated in AI and semiconductor-related issues, and "many investors hold stocks outside the buying sphere, with not a few securities salespeople looking less than cheerful," said a market source. Nevertheless, the momentum in AI and semiconductor-related stocks appears likely to continue. From next week, June trading begins, and the appearance of SpaceX , hailed as "the largest IPO in history," is scheduled. While attracting attention as a space venture, it also operates satellite communication service "Starlink" and AI "xAI" under its umbrella, giving it a strong coloring as an AI-related stock. SpaceX's IPO could further accelerate the popularity of AI and semiconductor-related stocks.

Furthermore, next week on the 2nd, Kioxia Holdings' Investor Day for institutional investors and analysts is scheduled. The company's approach to growth investment and shareholder returns is expected to be presented, with its stance toward dividends drawing particular attention. Market watchers suggest "it could be a neutral or somewhat positive event for the market," raising market interest. Next week also includes the release of the U.S. May employment statistics on the 5th, and major U.S. semiconductor company Broadcom is scheduled to announce earnings on the 3rd.

Other scheduled events include: Overseas - U.S. May ISM Manufacturing Index on the 1st, U.S. April JOLTS job openings on the 2nd, U.S. May ADP employment statistics, U.S. May ISM Non-Manufacturing Index, and Beige Book (Federal Reserve District Economic Report) on the 3rd. Palo Alto Networks announces earnings on the 2nd, and CrowdStrike on the 3rd.

Domestically - Q1 (January-March) Financial Statements Statistics of Corporations by Industry on the 1st, 10-year bond auction on the 2nd, April Monthly Labour Survey and April Household Survey on the 5th. Bank of Japan Governor Kazuo Ueda will give a speech on the 3rd. Earnings announcements are scheduled for ITO EN,LTD. <2593> on the 1st, UCHIDA YOKO CO., LTD. <8057> on the 3rd, Sekisui House,Ltd. <1928> and SENSHU ELECTRIC CO.,LTD. <9824> on the 4th, and NIPPON PARKING DEVELOPMENT Co.,Ltd. <2353> on the 5th. Next week's forecast range for the Nikkei Stock Average is around 64,500 to 67,300 yen. (Hideyuki Okazato)

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.