Rising oil prices could also weaken the yen by worsening Japan's trade balance and supporting the dollar. If US employment and inflation figures released in early August are subdued, market conditions could begin stabilising from mid-month. BofA expects Japanese stocks to recover towards the end of the year after clearing the near-term hurdles. The strategists advised investors to retain some AI exposure but avoid companies whose valuations have risen excessively. Related articlesJapan's stock market is facing these 3 hurdles in AugustTrump orders new military strikes on Iran as talks collapse, WSJ reportsInteger Holdings stock surges 21% on KKR takeover report