Nikkei 225 set for volatile week as tech, data loom

The Nikkei 225 climbed 1.65% to 66,130 on Monday, marking its highest close since Aug. 28. Technology stocks led the advance: SoftBank climbed about 8.3%, Kioxia gained roughly 7.6%, and Tokyo Electron and Advantest rose near 5% each. Investors are positioning ahead of a planned Anthropic initial public offering and a series of economic releases in Japan and the United States this week.

Market participants have pushed shares of memory and semiconductor suppliers higher after losses earlier in the summer. Companies such as Micron, SanDisk, Samsung and SK Hynix have each recovered by double digits from June lows. Expectations for large IPOs tied to artificial intelligence have been cited as a driver of demand for technology stocks, and some investors expect further listings to support interest in the sector.

Japan’s statistics agency will publish second-quarter gross domestic product on Tuesday. The median forecast among economists projects 0.3% quarter-on-quarter growth and 1.1% year-on-year expansion, with capital expenditure seen falling about 1.2% for the quarter. Market participants will watch capital spending for signs of corporate investment momentum.

Japan’s producer price index is due on Friday, ahead of the Bank of Japan’s policy meeting next week. Forecasters have priced in a 25 basis point rate increase by the BOJ, which would narrow the gap with US interest rates. Changes in yield differentials could affect the yen’s role as a funding currency for carry trades and prompt flows into Japanese bonds.

US producer and consumer inflation readings are scheduled for Thursday and Friday and are expected to show inflation above the Fed’s 2% target, partly driven by fuel costs. Stronger-than-expected US inflation would raise the probability of further US rate hikes after a recent robust nonfarm payrolls report.

Public comments from former US officials proposing trade measures against countries with which the United States runs a deficit have put Japan under closer scrutiny because of its large trade surplus. Traders will monitor any escalation in rhetoric for potential effects on export demand.

Rising global bond yields remain a factor for equity markets. Higher yields can prompt some investors to shift allocations from stocks into fixed income, a dynamic that may influence the Nikkei’s performance in the days ahead.

The Nikkei 225 is a price-weighted index of 225 large companies listed on the Tokyo Stock Exchange and is sensitive to moves in technology and export-oriented firms.