Nikkei Stock Average Set to Fall as US Tech Weakness and Tariff Concerns Weigh — Key Market Factors for August 25 — BigGo Finance

The Tokyo stock market on August 25 is expected to open lower, with the Nikkei Stock Average set to decline as weakness in semiconductor-related stocks and caution over US tariff policy weigh on sentiment. In New York trading on Friday, August 22, the NY Dow rose 140 dollars to extend its winning streak, while the Nasdaq Composite and SOX index both fell. Chicago Nikkei 225 Futures settled at 65,365 yen, 75 yen below the Osaka Exchange clearing price, suggesting selling will lead the way in Tokyo.

In the previous Friday’s US session, the NY Dow climbed to 53,417 dollars, marking a third consecutive day of gains, supported by economic indicators pointing to resilient growth. Declining long-term US interest rates also eased concerns about relative equity valuations, underpinning investor sentiment. However, the tech-heavy Nasdaq fell more than 200 points, and the semiconductor-focused SOX index plunged more than 317 points, highlighting a sharp divergence across indices. Market participants noted that “a rotation into cyclical stocks has become pronounced, while profit-taking pressure is building in semiconductor and other tech names.”

In the Tokyo market, the Tokyo Stock Exchange’s push for corporate value enhancement and active share buybacks continue to be seen as factors supporting the downside. However, uncertainty surrounding the Trump administration’s tariff policy and concerns over China’s economic slowdown are capping the upside. The Nikkei Stock Average closed the previous Friday down 488 yen at 65,528 yen, and the battle around this level will be the focal point as the new week begins. Market participants have pointed out that “if the correction in US tech stocks continues, downward pressure on the index could intensify, led by high-priced semiconductor-related names.”

Domestic Factors to Watch

In Japan, the revised June coincident index and leading composite index will be released on August 25. Attention will focus on how both the coincident index, which reflects current economic conditions, and the leading index, which signals developments several months ahead, factor into the Cabinet Office’s underlying assessment.

The Bank of Japan’s core consumer price gauge will also be closely watched. In measuring progress toward its price target, the Bank of Japan places emphasis not only on core CPI excluding fresh food but also on “core-core CPI,” which additionally strips out energy. This will serve as a clue for gauging the future direction of monetary policy.

On the consumption front, July nationwide department store sales and Tokyo-area department store sales will be released. Market interest centers on how the recovery in inbound demand and summer sales trends are reflected in the figures, as a gauge of the sustainability of personal consumption.

Overseas Factors to Watch

Overseas, Germany’s final April-June GDP figures and the August IFO Business Climate Index will be released. Business sentiment in Germany, the largest economy in the eurozone, is regarded as a key indicator for assessing the outlook for the broader European economy. In Brazil, the FIPE Consumer Price Index (previous week) and FGV Consumer Confidence are also scheduled for release.

In the United States, the June S&P/CoreLogic Case-Shiller 20-City Home Price Index, the FHFA House Price Index, and July new home sales will be released in succession. Housing market trends will serve as a gauge for spillover effects on personal consumption and employment amid lingering concerns about a US economic slowdown. Additionally, the August US Consumer Confidence Index will be published, with focus on household perceptions of the labor market and inflation outlook.

Market views suggest that “while domestic expectations for corporate value improvement measures remain firmly rooted, there are many sources of uncertainty from overseas, making it difficult to aggressively chase upside. It is likely to be a day of seeking direction while assessing the results of economic indicators.”