The US stock market rose for the second consecutive day amid optimism that negotiations over raising the nation’s debt ceiling can be resolved in the next few days. In economic data release, Initial Jobless Claims fell to 242,000 (lower than expectations and the previous week), a sign of a tight labor market. Existing Home Sales (Apr.) fell to 3.4%, lower than forecast and the last period. About two-thirds of traders expect the Federal Reserve to pause its interest rate hikes at next month’s FOMC Meeting while officials asses how well their actions to date have done to cool inflation. Not all officials agree on a pause interest rate hike; given that the economy showed an easing inflation rate, this doesn’t justify a pause since the labor market remains tight. Furthermore, Fed Chairman Jerome Powell’s statement scheduled for later evening will undoubtedly become the market’s attention. From Asia, Japan confirmed its 1Q23 GDP at 1.6% YoY, higher than the 0.7% forecast, and managed to¬† reverse the situation from negative 0.1% in the previous quarter. Industrial Production (Mar.) also rose on a monthly basis to 1.1%. They also managed to post a Trade Balance (Apr.) of JPY -432.4 billion, a smaller deficit than expected or the previous month. Earlier today, Japan also released their National CPI & Core CPI (Apr.), which came in at 3.5% & 3.4% YoY respectively. While from Europe, German PPI (Apr.) figures will be awaited today, after the Eurozone previously reported CPI (Apr.) remains in line at 7% YoY.

Considering that JCI had to close at the critical Support area of 6660-6650, NHKSI RESEARCH expects that the market direction will not shift much towards bullish as it lacks any positive sentiment. Again, caution is advised that there is still a possibility for JCI to slide even lower toward the Target bottom of 6560-6550. Advise: Hold, Wait & See.

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