Tokyo stocks seen falling sharply on June 8 as risk-off accelerates following plunge in U.S. semiconductor stocks

The Tokyo stock market is expected to see an accelerated risk-off trend on Monday, primarily in leading semiconductor shares, with the Nikkei Stock Average likely to plunge for a second consecutive session. While the index fell to the mid-66,000 yen level on Friday, futures-led selling today could potentially drive it down through three major thresholds toward the 63,000 yen mark. Although risk-averse sentiment gripped Asian stock markets on Friday, European equities ended mixed without a pronounced bearish tilt. However, Wall Street consistently probed lower after the opening bell, with all three major indexes posting steep losses. The tech-heavy Nasdaq Composite Index plunged more than 1,100 points, shedding over 4%. The May U.S. employment report released that day showed non-farm payrolls increased by 172,000, significantly beating market forecasts. This underscored resilient labor demand and fueled speculation about potential interest rate hikes by the Federal Reserve this year. The benchmark U.S. 10-year Treasury yield surged, stoking concerns over the relative overvaluation of equities. Chip stocks bore the brunt of the sell-off, triggering a cascade of liquidations that sent the Philadelphia Semiconductor Index (SOX Index) plummeting more than 10%. This marked its steepest decline in approximately six years and three months, rapidly chilling investor sentiment. The rout in U.S. semiconductor shares is certain to intensify selling pressure on peer stocks in Tokyo. Given the heavy weighting of semiconductor components in the Nikkei Stock Average, they are likely to amplify the index's decline. Concerns are also mounting that selling pressure could intensify ahead of Friday's major special quotation (SQ) settlement.

On Wall Street on Friday, the Dow Jones Industrial Average shed 695.15 dollars to close at 50,866.78. The Nasdaq Composite Index dropped 1,121.53 points to 25,709.43.

On the economic calendar today: revised GDP figures for the January-March quarter, cross-border securities transactions for May, the balance of payments for April, bank lending and deposit trends for May, and the Economy Watchers Survey for May.

Source: MINKABU PRESS

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