Tokyo stocks seen extending sharp gains on hopes for Iran ceasefire, semiconductor shares to lead rebound

Japanese shares are expected to extend sharp gains on the 12th, with the Nikkei share average forecast to surpass 66,000 and remain firm throughout the session.

Major U.S. stock indexes rallied sharply on the 11th. The Dow Jones Industrial Average, which tumbled the previous day, fully reversed losses to reclaim 50,000. The Nasdaq Composite rose 2.5%, while the Philadelphia Semiconductor Index (SOX) surged 7.9%, with Micron , Marvell Technology Group , and SanDisk each jumping more than 10%. President Donald Trump announced via social media he was calling off a planned strike against Iran scheduled for that evening, disclosing that negotiations with Iran had been approved by the country's leadership. Trump also indicated to reporters he intends to hold a memorandum-signing ceremony this weekend to end hostilities. While uncertainties remain, including Iran's response, markets reacted sharply to Trump's social media post and remarks, sending U.S. crude futures lower and pulling down long-term Treasury yields as short-covering dominated in major shares. In overnight trading on the Osaka Exchange, the Nikkei 225 September futures contract settled at 66,540 yen, up 2,060 yen from the June 11 settlement price.

Today marks the Major SQ (Special Quotation) calculation for June stock index futures and options. The Nikkei average has swung sharply in recent sessions, making the SQ settlement level difficult to predict. With risk appetite strengthening on improved external conditions, today's open is expected to be driven by supply-demand factors tied to futures and options positioning. Should some high-priced issues open higher and push the cash index below the market's estimated SQ level, the so-called "phantom SQ" anomaly could come into play, potentially capping upside in Japanese equities. However, if such concerns prove unfounded, a move toward 67,000 could be in store.

On the 11th, the Dow Jones Industrial Average closed up 929.97 dollars at 50,848.75 dollars, marking a sharp rebound. The Nasdaq Composite rose 640.15 points to 25,809.65.

On the domestic calendar, final April industrial production data is due during trading hours. Overseas, Space X will debut on the Nasdaq, drawing close market attention. Additionally, the preliminary June University of Michigan Consumer Sentiment Index is among key data releases.

Source: MINKABU PRESS

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