Japan Stock Market May Head South Again On Monday

(RTTNews) - The Japanese stock market bounced higher again on Friday, one day after ending the two-day winning streak in which it had climbed more than 730 points or 1.2 percent. The Nikkei 225 now sits just above the 66,400-point plateau although it may hand back those gains on Monday.

The global forecast for the Asian markets is soft on pessimism over the outlook for interest rates. The European markets were up and the U.S. bourses were down and the Asian markets figure to follow the latter lead.

The Nikkei finished modestly higher on Friday following gains from the financial shares, property stocks and textile companies, while the industrials were down and the technologies were mixed.

For the day, the index collected 273.59 points or 0.41 percent to finish at 66,405.56 after trading between 66,012.20 and 66,842.82.

The lead from Wall Street is weak as the major averages opened slightly higher on Friday but turned lower by midday and remained under water for the balance of the session.

The Dow dipped 9.45 points or 0.02 percent to finish at 53,559.99, while the NASDAQ sank 138.93 points or 0.52 percent to end at 26,402.42 and the S&P 500 fell 19.23 points or 0.25 percent to close at 7,711.76. For the week, the NASDAQ advanced 0.9 percent and the Dow and S&P 500 both rose 0.5 percent.

The weakness that emerged on Wall Street came as Federal Reserve Chairman Kevin Warsh's first speech at the Jackson Hole economic symposium was seen as having a hawkish tilt.

Warsh said that oversharing policy deliberations and overcommitting to future decisions can lead markets, businesses, and households astray. However, he said the numbers that are most concerning are in regard to the price-stability side of the Fed's dual mandate.

Following Warsh's remarks, the chances the Fed will raise interest rates by a quarter-point next month have jumped to 57.7 percent from just 35.4 percent, according to CME Group's FedWatch Tool.

Crude oil prices edged lower Friday as the shift by the U.S. to pressure Iran economically rather than by force dampened the risk premium for crude oil. West Texas Intermediate crude for October delivery eased $0.13 or 0.16 percent at $83.40 per barrel.

Closer to home, Japan will release a batch of data on Monday, including July figures for industrial production, retail sales, construction orders and housing starts. In June, production was up 1.9 percent on month, while sales rose 0.6 percent on year, construction orders gained an annual 2.3 percent and housing starts jumped 18.6 percent on year.