2025年10月26日日曜日

Outlook for the Nikkei average this week [26 October 2025]

 [Fundamental viewpoint]

Last week on the US markets, stock indices rose over the week as concerns over US-China trade friction eased for the time being, alongside strong corporate earnings and expectations of an interest rate cut in October.

Weekly change rate: NY Dow: +2.20%, NASDAQ: +2.31%, S&P 500: +1.92%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.40 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 22.8 and the Nikkei 225's P/E ratio of 19.1 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.40 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 26.1 Or, the Nikkei 225 will be around 67,340 yen.

As a result, the Japanese market is undervalued by about 18,040 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥18,040 less attractive than the US market. Last week, the weakness in the Japanese market diminished.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

    Rising US market

② Increase in profit forecast for the current fiscal year above the previous year's level

Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

Foreign investors over-buying

 

Looking at recent movements

    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.5%. This is a deterioration of 2.5 percentage points compared to three months ago.

    US long-term interest rates declined, and although the interest rate differential between Japan and the US narrowed from 2.39 to 2.35, the dollar-yen exchange rate moved in a yen-weakening direction within the range of the 150-yen to 153-yen levels. The dollar index rose by +0.40% over the week.

    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

    The third week of October saw net buying, the fourth week likely saw net buying, and net buying is anticipated this week. Last week, points and were bullish factors out of the five points. This week, points , , and are expected to have an impact.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 5.5 percentage points (equivalent to approximately ¥2620 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.9 percentage points (equivalent to approximately ¥6610 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is performing more strongly than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, fell to 16.4 on a weekly basis. The Nikkei VI also declined to 25.4 on a weekly basis. The US market is in an “optimistic” state, while the Japanese market is in a state of “mood of suspicion”.

 

The Nikkei average is above both the 9-day and 25-day moving averages. A green light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +41.8%, while the deviation rate from the 200-day moving average is +23.6%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is above the 9-day line and 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the 9-day line and 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘green light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 151 and 154 yen per dollar range.

 

This week in the US markets, the FOMC meeting - taking place without the usual data due to the government shutdown - will be the main focus. With uncertainty surrounding US economic indicators due to the shutdown, attention is likely to shift to key earnings announcements from companies such as Microsoft, Apple, Alphabet, Meta, Amazon, UnitedHealth, and ExxonMobil. The meeting between President Trump and Chinese President Xi Jinping will also draw significant attention. Globally, policy rate decisions from the ECB and the Bank of Japan, GDP statistics and inflation rates from Eurozone member states, and China's PMI data are scheduled for release.

 

Last week, the Nikkei average traded within the expected range. The upper limit fell short by 60 yen, while the lower limit exceeded it by 610 yen.

This week, the Nikkei average is expected to move within a range defined by the upper limit at the Bollinger Band +2σ (currently around 50,240 yen) and the lower limit at the 25-day moving average (currently around 46,970 yen).

             

This week's Nikkei average is expected to see volatile movements, influenced by the Federal Reserve and Bank of Japan's policy rate decisions and the future direction of monetary policy.

2025年10月19日日曜日

Outlook for the Nikkei average this week [19 October 2025]

 [Fundamental viewpoint]

Last week on US markets, although there were periods of decline amid concerns over US-China trade tensions and regional bank credit worries, caution eased for the time being following President Trump's remarks and resilient regional bank earnings reports. Consequently, stock indices rose over the week.

Weekly change rate: NY Dow: +1.56%, NASDAQ: +2.14%, S&P 500: +1.70%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.76 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.0 and the Nikkei 225's P/E ratio of 18.3 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.76 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.0 Or, the Nikkei 225 will be around 70,230 yen.

As a result, the Japanese market is undervalued by about 22,650 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥22,650 less attractive than the US market. Last week, the weakness in the Japanese market intensified.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

    Rising US market

② Increase in profit forecast for the current fiscal year above the previous year's level

Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

Upward revision of Japan's 2025 GDP estimate (now +3.3%) by OECD

Foreign investors over-buying

 

Looking at recent movements

    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can return above the 25-day line.

    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.9%. This is a deterioration of 3.6 percentage points compared to three months ago.

    Although US long-term interest rates declined, the interest rate differential between Japan and the US widened from 2.36 to 2.39. Consequently, the dollar-yen exchange rate moved towards a stronger yen, fluctuating within the range of 152 to 149 yen per dollar. The dollar index fell by -0.32% over the week.

    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

    The second week of October saw net buying, the third week of October likely saw net buying, and net buying is expected this week. Last week, out of the five points, was the bullish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 5.5 percentage points (equivalent to approximately ¥2620 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.9 percentage points (equivalent to approximately ¥6610 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, fell to 20.8 on a weekly basis. The Nikkei VI rose to 35.5 on a weekly basis. The US market is in a state of “mood of suspicion”, while the Japanese market is in a state of “height phobia”.

 

The Nikkei 225 is below the 9-day line and above the 25-day line. The short-term trend is now showing a “green signal.

The Nikkei 225 is above the Ichimoku Kinko's Kumo (equilibrium) cloud. The overall divergence was +34.2%, while the 200-day moving average divergence was +20.1%. As all three factors are positive, the medium-term trend has a "green light".

 

In the US market, the NY Dow is below the 9-day line and 25-day and above 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is below the 9-day line and above 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘yellow light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term no trend. The Japanese market is in a medium-term up trend, and the short-term is no trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 149 and 152 yen per dollar range.

 

This week in the US markets, investors will continue to monitor developments in the US-China trade dispute. The US corporate earnings season is also in full swing, with major companies such as Tesla, P&G, GE, Coca-Cola, Netflix, IBM, AT&T, Verizon and Intel scheduled to report their results. The US federal government shutdown is expected to enter its fourth week, though traders will also focus on the Consumer Price Index (CPI), S&P Global PMI, and existing home sales figures. Globally, releases include China's third-quarter GDP, retail sales, industrial production, PMIs for the Eurozone, Germany, and the UK, alongside Japan's PMI, trade statistics, and price data.

 

Last week, the Nikkei average significantly exceeded its projected range. The upper limit surpassed 950 yen, while the lower limit exceeded 4,040 yen.

This week, the Nikkei average is projected to move within a range defined by the upper limit at the Bollinger Band +2σ (currently around 48,930 yen) and the lower limit at the 25-day moving average (currently around 46,050 yen).

             

This week's Nikkei average is expected to be influenced more by movements in the US market—such as US-China trade friction, the US government shutdown, and concerns over regional bank credit—than by domestic factors. Until this uncertainty dissipates, the upward momentum is likely to be dampened.

2025年10月13日月曜日

Outlook for the Nikkei average this week [13 October 2025]

 [Fundamental viewpoint]

Last week on the US markets, stock indices fell over the week as President Trump hinted at raising tariffs on China in response to Beijing's announcement of tighter rare earth export controls.

Weekly change rate: NY Dow: -2.73%, NASDAQ: -2.53%, S&P 500: -2.43%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.57 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.0 and the Nikkei 225's P/E ratio of 18.7 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.57 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 26.4 Or, the Nikkei 225 will be around 67,940 yen.

As a result, the Japanese market is undervalued by about 19,850 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥19,850 less attractive than the US market. Last week, the weakness in the Japanese market narrowed.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

    Rising US market

② Increase in profit forecast for the current fiscal year above the previous year's level

Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

Upward revision of Japan's 2025 GDP estimate (now +3.3%) by OECD

Foreign investors over-buying

 

Looking at recent movements

    The weekly leg of the NYDow was negative last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can return above the 25-day line.

    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.6%. This is a deterioration of 3.2 percentage points compared to three months ago.

    US long-term interest rates declined, narrowing the interest rate differential between Japan and the US from 2.47 to 2.36. Nevertheless, the dollar-yen exchange rate moved in a yen-weakening direction, fluctuating within the range of 149 to 153 yen per dollar. The dollar index rose by +1.17% over the week.

    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

    The first week of October saw net buying, the second week likely saw net buying, and this week is expected to see net selling. Last week, points and were the bullish factors among the five points.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 9.3 percentage points (equivalent to approximately ¥4470 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 17.1 percentage points (equivalent to approximately ¥8220 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 21.6 over the week. The Nikkei VI rose to 30.1 over the week. Both the US and Japanese markets are in a state of ‘fear.

 

The Nikkei 225 is above the 9-day line and the 25-day line. The short-term trend is now showing a “green signal.

The Nikkei 225 is above the Ichimoku Kinko's Kumo (equilibrium) cloud. The overall divergence was +41.1%, while the 200-day moving average divergence was +21.9%. As all three factors are positive, the medium-term trend has a "green light".

 

In the US market, the NY Dow is below the 9-day line and 25-day and above 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the below the 9-day line and 25-day and above 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘red light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market shows that the yen has turned stronger since topping out at 156 yen, which was reached in January 2025. This week, the yen is expected to be between 151 and 147 yen.

 

This week in US markets, attention centres on the start of earnings season, with major banks scheduled to report results. Meanwhile, as the government shutdown enters its third week, key economic indicators such as the Consumer Price Index (CPI) are expected to remain delayed. However, other scheduled indicators including the Industrial Production Index, Housing Market Index, and Philadelphia and New York Fed Manufacturing Activity Indices will continue to be closely watched. Globally, investors will focus on China's trade statistics and inflation rate, eurozone industrial production and inflation, Germany's business climate index, UK employment and GDP data, and Japan's political situation.

 

Last week, the Nikkei average exceeded its projected range. The upper limit surpassed 970 yen, while the lower limit exceeded 21,800 yen.

This week's projected range for the Nikkei average is expected to move between the upper Bollinger Band +1σ (currently around ¥46,920) and the lower Bollinger Band -2σ (currently around ¥42,180).

             

This week, the Nikkei average is expected to fluctuate depending on the US-China trade friction and the direction of Japan's new administration, but selling pressure is likely to prevail until uncertainty subsides.

2025年10月5日日曜日

Outlook for the Nikkei average this week [5 October 2025]

 [Fundamental viewpoint]

Last week in the US markets, expectations of further interest rate cuts by the Federal Reserve fuelled optimism about the US stock market outlook, leading to weekly gains in stock indices.

Weekly percentage change: NY Dow: +1.10%, NASDAQ: +1.32%, S&P 500: +1.09%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.87 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.4 and the Nikkei 225's P/E ratio of 18.3 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.87 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.7 Or, the Nikkei 225 will be around 69,500 yen.

As a result, the Japanese market is undervalued by about 23,730 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥23,730 less attractive than the US market. Last week, the weakness in the Japanese market narrowed.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

    Rising US market

② Increase in profit forecast for the current fiscal year above the previous year's level

Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

Upward revision of Japan's 2025 GDP estimate (now +3.3%) by OECD

Foreign investors over-buying

 

Looking at recent movements

    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.8%. This is a deterioration of 5.5 percentage points compared to three months ago.

    US long-term interest rates declined, narrowing the interest rate differential between Japan and the US from 2.54 to 2.47. Consequently, the dollar-yen exchange rate moved towards yen appreciation, fluctuating within the range of 149 to 146 yen per dollar. The dollar index fell by -0.48% over the week.

    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

    The fourth week of September saw net selling, while the first week of October likely saw net buying; net buying is anticipated this week. Last week, out of five points, was a bullish factor and was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 0.6 percentage points (equivalent to approximately ¥270 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 8.6 percentage points (equivalent to approximately ¥3,940 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is performing more strongly than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 16.7 over the week. The Nikkei VI fell to 24.8 over the week. The US market is optimistic, while the Japanese market is in a state of “mood of suspicion”.

 

The Nikkei 225 is above the 9-day line and the 25-day line. The short-term trend is now showing a “green signal.

The Nikkei 225 is above the Ichimoku Kinko's Kumo (equilibrium) cloud. The overall divergence was +29.5%, while the 200-day moving average divergence was +16.6%. As all three factors are positive, the medium-term trend has a "green light".

 

In the US market, the NY Dow is above the 9-day line and 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the 9-day line and 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘green light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market shows that the yen has turned stronger since topping out at 156 yen, which was reached in January 2025. This week, the yen is expected to be between 148 and 151 yen.

 

This week in the US markets, the release of government economic indicators is in doubt due to the US government shutdown. Nevertheless, the FOMC minutes are still scheduled for release. Among non-governmental releases, the University of Michigan Consumer Sentiment Survey for October will be closely watched. Globally, the ECB meeting minutes, German industrial production, eurozone retail sales, and Russian inflation indicators are due for release.

 

Last week, the Nikkei average traded within the expected range. The upper limit fell below 850 yen, while the lower limit rose above 380 yen.

This week, the Nikkei average is expected to move within a range defined by the upper limit at the Bollinger Band +2σ (currently around 46,630 yen) and the lower limit at the 25-day moving average (currently around 44,210 yen).

             

This week, the Nikkei average is expected to fluctuate depending on the impact of the prolonged US government shutdown, following the celebratory rally triggered by Governor Takaichi's appointment.