Tokyo shares are poised for a sharp rebound on June 3, with the Nikkei Stock Average expected to open significantly higher on buybacks targeting major issues. In the previous session, the index tumbled more than 1,300 yen at one point before rapidly clawing back losses to close down just 200 yen. However, the number of stocks hitting new lows hit a year-to-date high, underscoring market bifurcation. Investors will watch whether new lows diminish as the Nikkei recovers. European shares broadly advanced on Tuesday; while major catalysts were absent, optimism over U.S.-Iran negotiations prompted short-covering, lifting Germany's DAX, France's CAC 40, and the U.K.'s FTSE 100. On Wall Street, cyclical stocks led gains as Caterpillar jumped, pushing the Dow Jones Industrial Average to a record high for a fifth straight session. Renewed optimism for AI infrastructure spending also fueled semiconductor shares, sparked by a surge in Applied Materials . The Philadelphia Semiconductor Index (SOX) soared 5.9%, boosting investor sentiment. Supporting the market, the April U.S. JOLTS report showed job openings hit a near two-year high, confirming robust labor demand. Tokyo is set to track the Wall Street rally in a risk-on environment, with eyes also on foreign exchange moves and JGB yields after Tuesday's sharp decline in long-term interest rates.

U.S. stocks extended gains on Tuesday, with the Dow rising 228.91 points to 51,307.79, marking its fifth straight record close. The Nasdaq Composite Index ticked up 7.09 points to 27,093.90.

Domestic focus centers on the Bank of Japan's June current account projections and a speech by Governor Kazuo Ueda at a Kyodo News event. Overseas data includes China's Caixin services PMI, the U.S. ADP National Employment Report, the ISM non-manufacturing index, April factory orders, and the Federal Reserve's Beige Book. South Korean and Thai markets are closed.

Source: MINKABU PRESS

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