The Tokyo stock market is poised to face selling pressure on Thursday, with the benchmark Nikkei Stock Average likely to decline. Overnight, the index surged by more than 2,000 yen intraday before closing with a gain exceeding 1,600 yen, rapidly climbing to the 68,000-yen level. However, amid growing signs of overheating in the semiconductor sector and peripheral shares that recently spearheaded the market, profit-taking is expected to weigh on equities. During the previous session, while Asian markets finished mixed, risk-off sentiment intensified starting from the European session, dragging Germany's DAX down 1.3%, while France's CAC 40 and the UK's FTSE 100 trended generally weaker. With no resolution in sight regarding geopolitical tensions involving Iran and amid rising crude oil prices, buying interest remained subdued. On Wall Street, the Dow Jones Industrial Average snapped a five-day winning streak to slide more than 600 points from its record highs, while the Nasdaq Composite and S&P 500 both fell for the first time in 10 sessions. Geopolitical anxieties escalated following reports that U.S. forces engaged Iranian vessels, while Iran allegedly launched missile strikes against Kuwait and Bahrain, alongside a drone attack targeting a terminal at Kuwait International Airport. This pushed WTI crude oil futures back toward the 100 dollars per barrel mark, exerting upward pressure on long-term interest rates. Meanwhile, the May ADP National Employment Report beat expectations, underscoring labor market resilience and further dampening expectations for Federal Reserve interest rate cuts. In Tokyo, trading is expected to remain highly volatile amid mounting speculation over a Bank of Japan interest rate hike, with investors closely monitoring domestic bond yields and currency fluctuations.

On Wall Street on Wednesday, the Dow Jones Industrial Average dropped 620.72 points to close at 50,687.07, marking its first decline in six sessions. The Nasdaq Composite shed 239.93 points to end at 26,853.97.

Thursday's domestic economic calendar features the release of weekly cross-border securities transactions data ahead of the open, followed by May auto sales reports encompassing imported vehicles, new vehicle registrations by model, and mini-vehicles during trading hours. Internationally, market focus will shift to April Eurozone retail sales, weekly U.S. initial jobless claims, and the revised first-quarter U.S. labor productivity index.

Source: MINKABU PRESS

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