Tokyo stocks seen dipping on profit-taking but downside limited, supported by U.S. semiconductor gains

The Nikkei Stock Average is expected to open lower on Oct. 2, though strong performance in U.S. semiconductor shares is likely to limit downside risks.

On Wall Street the previous day, the Dow Jones Industrial Average and Nasdaq Composite ended nearly flat, while the Philadelphia Semiconductor Index (SOX) rose nearly 1.6%. Concerns over rising U.S. long-term interest rates weighed on the broader market, keeping the Dow in negative territory for much of the session before position adjustments ahead of the U.S. September jobs report pushed it into positive territory at the close. Minneapolis Federal Reserve President Kashkari told Reuters he had "no strong opinion" on whether to raise rates at the October Federal Open Market Committee (FOMC) meeting, while Fed Vice Chair Jefferson signaled no rush for further rate hikes in a speech. The easing expectations for additional rate increases provided underlying support for equities. Among individual stocks, Micron Technology , which reported earnings after the close on the 30th, gained 3%, while software shares also attracted buyers. Nikkei futures for December closed at 68,520 yen in Chicago, a level that will be closely watched during the Tokyo morning session and points to a soft start for the Nikkei.

The Nikkei average surged 3,475 points over the previous two trading sessions, approaching the 69,000 level. With the U.S. employment report looming, profit-taking in blue-chip shares is likely to build. On the other hand, excessive concerns over consecutive Bank of Japan rate hikes at its October policy meeting have abated, and expectations for continued foreign capital inflows into Japanese equities remain firm, making investors hesitant to aggressively sell AI- and semiconductor-related stocks. A wait-and-see mood is expected to prevail heading into the close.

In U.S. trading on the 1st, the Dow Jones Industrial Average rose $20.51 from the previous session to $50,926.56, rebounding for the first time in four sessions. The Nasdaq Composite Index gained 10.53 points to 26,871.59.

On the domestic calendar, the September Tokyo Consumer Price Index, August unemployment rate, August job-to-applicant ratio, and September monetary base are all scheduled for release before the opening bell. After the close, FAST RETAILING CO., LTD. <9983> will release a flash report on September domestic UNIQLO sales trends. Overseas, markets await the U.S. September employment report, eurozone September Consumer Price Index, and U.S. August factory orders, among other key indicators.

Source: MINKABU PRESS

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