The predicted range for the Nikkei average this week is 36,800 yen to 38,800 yen | This week's market outlook | Moneyクリ Monex Securities investment information and media useful for money.

President Trump announced on the 21st via his social media (SNS) that the U.S. military had attacked three Iranian nuclear facilities. Following this, President Trump delivered a speech to the nation from the White House on the night of the 21st (the morning of the 22nd in Japan) regarding the airstrikes on Iran's nuclear facilities. He emphasized that large-scale attacks were carried out at three locations and stated, "I can report that it was a military success. Iran's major nuclear enrichment facilities have been completely destroyed." He also mentioned that there is a readiness to carry out further attacks depending on Iran's future response. As of the time of writing (noon on the 22nd in Japan), this is the extent of the reports coming in, but the Tokyo market at the start of the week will be the market that is expected to react first to the shock that occurred over the weekend.

Last week, the Nikkei average was bought up to reach its highest level in about four months, so at the beginning of the week, selling is likely to take precedence. For the time being, there will be a strong wait-and-see mood as we want to ascertain what kind of retaliatory actions Iran will take. In particular, until important points can be confirmed, such as whether there will be a closure of the Strait of Hormuz and the trends in crude oil prices in that case, many investors will not be able to act.

Last time when Israel attacked Iran, the yen, considered a safe asset, was bought, leading to a stronger yen. The dollar-yen exchange rate had also progressed to the 146 yen level in the NY market last weekend, so how much of a reaction we will see is also an important point.

Apart from the situation in the Middle East, another negative factor is the concern that the Trump administration will further strengthen restrictions on semiconductors against China. The Wall Street Journal (WSJ) reported that the administration is considering tightening these restrictions, and as a result, semiconductor stocks have already declined in overseas markets.

In any case, due to the escalating tensions in the Middle East, stocks are likely to be sold off in a risk-off environment, and the yen is expected to strengthen. Additionally, the negative impact of semiconductor regulations may lead to a significant decline in the Nikkei average at the start of the week. However, in response to these geopolitical risks and increasing uncertainty, domestic long-term interest rates are expected to decrease further. This should support the stock market. The biggest focus will be on whether the market incorporates a short-term convergence, leading to buying on dips at lower levels, and whether the market shows signs of stabilizing after a decline. This is something to watch closely.

Other materials will see the concentration day of the shareholders' meeting on the 27th. One seasonal factor behind the recent strong market is that selling tends to be limited during the shareholders' meeting season. Additionally, foreign buying has continued for 11 consecutive weeks, which will likely support the market due to good supply and demand.

Economic indicators domestically include the manufacturing PMI on the 23rd, department store sales for May on the 24th, the "main opinions" from the Bank of Japan's monetary policy meeting (held on June 16-17) on the 25th, the unemployment rate and job openings-to-applicants ratio for May on the 27th, and the consumer price index for June in the Tokyo metropolitan area.

Abroad, various PMIs for the Eurozone will be announced on the 23rd, the Conference Board Consumer Confidence Index on the 24th, the U.S. GDP (final value) for Q1 on the 26th, and U.S. personal income, personal spending, and deflator for May on the 27th.

The remarks of the FRB officials are also an event that should not be overlooked. In addition to Chairman Powell's congressional testimony, there will be a speech by Governor Waller. Recently, FRB Governor Waller expressed the view that it is possible to implement a rate cut as early as July, so attention is focused on his remarks during this speech.

The expected range is set between 36,800 yen and 38,800 yen.