Tokyo stocks seen extending losses as rising long-term yields in Japan and U.S. weigh on sentiment

Tokyo stocks are expected to face selling pressure centered on blue chips on Sept. 1, with the Nikkei Stock Average likely to extend losses. However, dip buying is expected to remain firm at lower levels. Yesterday, the index fell over 1,500 points early before steadily recovering to close near its daily high, down less than 100 points. The TOPIX, meanwhile, finished higher, extending gains to an eighth straight session. With the TOPIX again expected to outperform, the broader market will likely show resilience today.

European equity markets were broadly weak yesterday. Germany's DAX, which hit a record high on Friday, Aug. 28, fell over 1% to snap a five-session winning streak, while France's CAC 40 also weakened. Risk appetite was dampened after the U.S. launched military strikes against Iran for the first time in about a month, driving crude oil prices higher and reigniting geopolitical fears. In the U.S., all three major benchmark indices including the Dow Jones Industrial Average fell, with the Dow closing below its 25-day moving average - a key support level. A sharp rise in WTI crude oil futures pushed the U.S. 10-year Treasury yield as high as 4.76%, its highest level in about 19 months, creating headwinds for equities. Among individual stocks, semiconductor stocks showed strength, led by bellwethers NVIDIA and Micron Technology . Semiconductor developments are likely to influence Tokyo sentiment today, while markets remain focused on domestic long-term yields tracking U.S. moves.

On Aug. 31, the Dow Jones Industrial Average fell 374.09 points from the previous session to close at 53,185.90, extending its decline. The Nasdaq Composite Index dropped 31.54 points to 26,370.88.

On the domestic data calendar, today's releases include the April-June corporate enterprise statistics survey, the Aug. consumer confidence survey, Aug. new vehicle sales, and Aug. mini-vehicle sales. Overseas releases include China's Aug. Caixin Manufacturing PMI, the eurozone's July unemployment rate, the eurozone's Aug. flash CPI estimate, the U.S. ISM Aug. Manufacturing Index, U.S. July construction spending, and U.S. July JOLTS job openings data.

Source: MINKABU PRESS

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