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Nikkei Set for Decline as Ishiba Shakes Markets

Japanese equities faced downward pressure this week as Prime Minister Shigeru Ishiba’s shifting position on interest rate policy sent ripples through the markets. The Nikkei index dropped, reflecting its steepest weekly fall in a month. The Nikkei did rise in morning trade, but the broader market recovery has been slow, especially following the uncertainty sparked by Ishiba’s comments. The yen initially surged when Ishiba, previously a critic of the Bank of Japan’s aggressive monetary easing, gained support from the ruling Liberal Democratic Party. However, his recent dovish stance, where he suggested that Japan is not currently in an environment for additional rate hikes, reversed that yen rally. This sudden shift unsettled traders, with the Nikkei unable to fully regain its earlier losses. The Topix index followed a similar trajectory, increased but remaining down. Read more to find out why Nikkei falling.

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Disclaimer:

Looking ahead, traders will likely monitor Ishiba’s upcoming speech and any subsequent announcements regarding Japan’s monetary policy. While Japan’s equities market is vulnerable to both global and domestic factors, we could see a period of consolidation as participants weigh the impact of a stronger yen against the backdrop of a cautious recovery in global stock markets. Traders are advised to prioritize proper risk management to make well-informed trading decisions.

Publication date:

2024-10-06 14:19:07 (GMT)

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