Three points to watch in the afternoon session ~ dominant selling trend due to the fall of U.S. stocks, and a need to pay attention to external factors?
In the afternoon trading on the 17th, the following three points are worth noting.
- The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
- The dollar-yen rate is sluggish, with continued dollar buying.
- The top contributors to the decline were Fast Retailing and SoftBank Group. $Fast Retailing (9983.JP)$ - The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
The Nikkei average fell sharply. It closed the morning session at 26,703.00 yen, down 387.76 yen (with a trading volume of approximately 500 million 44.63 million shares).
On the 14th, the NY Dow in the US stock market fell sharply by 403.89 points (-1.34%). The observation of a significant interest rate hike by the Federal Reserve Board (FRB) increased further as the October Michigan Consumer Confidence Index and expected inflation rate exceeded expectations. As long-term interest rates rose, selling pressure resurfaced, with sell-offs seen at the end of the week, causing the market to extend its decline towards the close. The NASDAQ also fell significantly by 3.08%, following the decline in the major stock indexes in the US stock market, causing the Nikkei average to start the week with a sharp decline of 305.74 yen compared to the previous week, at 26,785.02 yen. Since then, it has been trading in a soft and indecisive manner.
Individually, some semiconductor-related stocks such as Tokyo Electron <8035>, Laser Tech <6920>, and Advantech <6857> declined, while large-cap stocks like Toyota Motor <7203>, Fast Retailing <9983>, and SoftBank Group <9984> also traded weakly. Sony Group <6758> $Sony Group (6758.JP)$ , Mercari <4385>, Nintendo <7974> $Nintendo (7974.JP)$ , growth stocks like Sony Group <6758>, Nintendo <7974>, other stocks such as Nippon Electric <6594>, BayCurrent <6532>, Keyence <6861>, SHIFT <3697> also saw significant declines. Additionally, Cleanliness HD <3387> which was negatively viewed due to profit slowdown in the 6-8 month period, Personnel Group <2168> which had a significant decrease in Q1 earnings, saw a sharp drop, while Server Works <4434>, Sansan <4443>, Jin's Holdings <3046>, appeared in the top declining rates of the Tokyo Main Board market.
Meanwhile, marine shipping stocks like Nippon Yusen <9101>, Kawasaki Kisen <9107>, Mitsui O.S.K. Lines <9104> rose sharply. Aviation stocks like ANA <9202>, JAL <9201> were trading robustly due to the continued relaxation of border control measures, while land transportation companies like JR East <9020>, JR Tokai <9022>, Sociomedia Next <6526>, Mitsubishi UFJ <8306> also rose. In addition, experts revised their upward earnings performance for the 23 February period, leading to significant increases for Hokkaido High Professionals <2930> and Teras Sky <3915>. Cellac <6199>, RPA Holdings <6572>, Signpost <3996>, appeared in the top gaining rate of the Tokyo Main Board market.
In the sectors, mining, pharmaceuticals, and wholesale saw the highest decline rates, while marine shipping, aviation, and electricity/gas saw the highest increase rates. 19% of the Tokyo Main Board's stocks rose, while 78% fell.
Today's Nikkei Stock Average opened sharply lower, then continued to trade weakly. Due to the Michigan Consumer Sentiment Index exceeding expectations for October, with expectations for inflation rates also higher, domestic investor sentiment worsened leading to selling pressure. With the Nasdaq falling by over 3%, the Tokyo market was also subdued by the decline in high-tech and semiconductor-related stocks, limiting bargain hunting. Furthermore, the China-Hong Kong market was weak, US stock futures were somewhat firm, but the Tokyo market continued to trend weakly.
Selling pressure continued in the emerging markets. The Tokyo Growth Market Core Index, consisting of the top 20 stocks by market capitalization in the Mothers Index and Growth Market, started lower and then traded weakly in negative territory. With the US long-term interest rates exceeding 4%, there is a heightened sense of overvaluation in emerging stocks, leading to a challenging environment. However, selective buying interest remains in individual material stocks, with the Mothers Index at a 0.55% decline at the close, a limited decrease compared to the Nikkei Stock Average, and the Tokyo Growth Market Core Index at a 1.66% decline led by top market capitalization stocks.
Now, the US September Consumer Price Index (CPI) announced on the 13th rose by 8.2% year-on-year, surpassing the expected 8.1% increase although it slowed down from August. The Core Index, excluding food and energy, increased by 6.6% year-on-year, a significant acceleration from August, surpassing the expected 6.5% increase. Strong growth was seen not only in housing costs, but also in the food and medical sectors. In addition, in the October University of Michigan Consumer Sentiment Index on the 14th, the expected inflation rate for a year ahead rose significantly to 5.1%, up from September, and for 5-10 years ahead to 2.9%, also higher than in September. Concerns about prolonged inflation have led to a continued rise in US long-term interest rates, reaching 4%.
On the 14th, Bloomberg reported that the president of the San Francisco Fed said that there are signs of cooling in the economy and expressed full support for continuing the interest rate hike to a restrained level. The president suggested that raising the policy interest rate to 4.5-5% is the most likely outcome.
On the other hand, the president of the Kansas City Fed has shown a cautious stance toward a rapid rate hike. He stated that a rapid rate hike could "ultimately cause self-destruction and confuse the financial markets and the economy." Furthermore, it seems that the president of the St. Louis Fed, Blard, made remarks implying the possibility of a rate hike of 0.75 points at both the November and December FOMC meetings, although it is premature to predict the rate hike at this time. Attention will be focused on the rate hike at the November and December FOMC meetings while keeping an eye on the hawkish remarks of future FRB officials.
In addition, the 20th Party Congress of the Communist Party of China opened on the 16th, and President Xi Jinping gave an activity report that outlined the future policy direction. Regarding the Taiwan issue, he asserted that "the wheels of history are moving forward" toward national reunification and stated that he would never promise to abandon the use of force. In the situation in Ukraine, a senior NATO official stated that if Russia were to use nuclear weapons, it would almost certainly trigger a "physical response" from Ukraine's allies and NATO member countries. It is necessary to continue to monitor not only the economic situation of each country, but also geopolitical risks such as the situation in Taiwan and Ukraine.
In last week's column, the author suggested that there is a possibility of a temporary rebound leading to a significant decline in the future. However, amidst various risks seen worldwide, even if there is a temporary rebound towards the end of the year, it is unlikely to be significant. Furthermore, while watching the market with the possibility of a significant decline in the future, it is important to consider the development of the November and December FOMC meetings and other risks, as the market may steadily decline towards the end of the year. Now, the afternoon session of the Nikkei Average is expected to continue trading in a dull and mixed manner. It is worth noting whether the trend of buying emerging stocks as a gap filler will continue while monitoring the movement of U.S. stock futures.
Dollar-yen is holding steady, with continued dollar buying
In the morning session of the Tokyo market on the 17th, the dollar-yen remained steady. The yen strengthened due to concerns about a sharp decline in the Nikkei Average, leading to selling of Japanese stocks, and the dollar temporarily fell to the mid-148 yen level. However, the prevailing trend of dollar buying, driven by expectations of a tightening by the Federal Reserve amid high U.S. inflation, caused the dollar to rebound.
The trading range so far is 148.43 to 148.72 yen for dollar-yen, 144.37 to 144.91 yen for euro-yen, and 0.9720 to 0.9752 dollars for euro-dollar.
Check stocks for the afternoon session
- No. 1 <3562>, BeeX <4270>, and 5 other stocks hit the daily limit.
* Includes temporary daily limit (indication price).
- The top contributor to the decline is Fast Retailing <9983>, followed by SoftBank Group <9984> in second place.
■ Economic Indicators & Official Comments
【Economic Indicators】
- US - September Retail Sales Preliminary: 0% month-on-month (est: +0.2%, August: +0.4%)
- US - September Retail Sales (ex. autos): +0.1% month-on-month (est: -0.1%, August: -0.1%)
- US - September Import Price Index: -1.2% month-on-month (est: -1.1%, August: -1.1%)
• US • University of Michigan Consumer Sentiment Index preliminary value for October: 59.8 (Forecast: 58.8, September: 58.6)
• US • University of Michigan 1-year Expected Inflation Rate preliminary value for October: 5.1% (September: 4.7%)
• US • University of Michigan 5-10 Year Expected Inflation Rate preliminary value for October: 2.9% (Forecast 2.8%, September 2.7%)
• US • August Business Inventories: Month-on-month +0.8% (Forecast: +0.9%, July: +0.5%)
【Key Person's Statement】
• Bailey, Governor of the Bank of England
"Agreement with Rishi Sunak, the new Finance Minister, on maintaining fiscal sustainability immediately"
• Kuroda, Governor of the Bank of Japan
"Continued monetary easing is appropriate."
"The consumer price index is expected to decrease below 2% in the next fiscal year."
<Domestic>
- 13:30 August 3rd Industrial Activity Index (MoM Forecast: +0.3%, July: -0.6%)
- 13:30 August Mining and Industrial Production Revised Value (Flash: MoM +2.7%)
<Overseas>
None in particular
- The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
- The dollar-yen rate is sluggish, with continued dollar buying.
- The top contributors to the decline were Fast Retailing and SoftBank Group. $Fast Retailing (9983.JP)$ - The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
The Nikkei average fell sharply, and the selling trend dominated due to the decline in US stocks. Should we also pay attention to external factors?
The Nikkei average fell sharply. It closed the morning session at 26,703.00 yen, down 387.76 yen (with a trading volume of approximately 500 million 44.63 million shares).
On the 14th, the NY Dow in the US stock market fell sharply by 403.89 points (-1.34%). The observation of a significant interest rate hike by the Federal Reserve Board (FRB) increased further as the October Michigan Consumer Confidence Index and expected inflation rate exceeded expectations. As long-term interest rates rose, selling pressure resurfaced, with sell-offs seen at the end of the week, causing the market to extend its decline towards the close. The NASDAQ also fell significantly by 3.08%, following the decline in the major stock indexes in the US stock market, causing the Nikkei average to start the week with a sharp decline of 305.74 yen compared to the previous week, at 26,785.02 yen. Since then, it has been trading in a soft and indecisive manner.
Individually, some semiconductor-related stocks such as Tokyo Electron <8035>, Laser Tech <6920>, and Advantech <6857> declined, while large-cap stocks like Toyota Motor <7203>, Fast Retailing <9983>, and SoftBank Group <9984> also traded weakly. Sony Group <6758> $Sony Group (6758.JP)$ , Mercari <4385>, Nintendo <7974> $Nintendo (7974.JP)$ , growth stocks like Sony Group <6758>, Nintendo <7974>, other stocks such as Nippon Electric <6594>, BayCurrent <6532>, Keyence <6861>, SHIFT <3697> also saw significant declines. Additionally, Cleanliness HD <3387> which was negatively viewed due to profit slowdown in the 6-8 month period, Personnel Group <2168> which had a significant decrease in Q1 earnings, saw a sharp drop, while Server Works <4434>, Sansan <4443>, Jin's Holdings <3046>, appeared in the top declining rates of the Tokyo Main Board market.
Meanwhile, marine shipping stocks like Nippon Yusen <9101>, Kawasaki Kisen <9107>, Mitsui O.S.K. Lines <9104> rose sharply. Aviation stocks like ANA <9202>, JAL <9201> were trading robustly due to the continued relaxation of border control measures, while land transportation companies like JR East <9020>, JR Tokai <9022>, Sociomedia Next <6526>, Mitsubishi UFJ <8306> also rose. In addition, experts revised their upward earnings performance for the 23 February period, leading to significant increases for Hokkaido High Professionals <2930> and Teras Sky <3915>. Cellac <6199>, RPA Holdings <6572>, Signpost <3996>, appeared in the top gaining rate of the Tokyo Main Board market.
In the sectors, mining, pharmaceuticals, and wholesale saw the highest decline rates, while marine shipping, aviation, and electricity/gas saw the highest increase rates. 19% of the Tokyo Main Board's stocks rose, while 78% fell.
Today's Nikkei Stock Average opened sharply lower, then continued to trade weakly. Due to the Michigan Consumer Sentiment Index exceeding expectations for October, with expectations for inflation rates also higher, domestic investor sentiment worsened leading to selling pressure. With the Nasdaq falling by over 3%, the Tokyo market was also subdued by the decline in high-tech and semiconductor-related stocks, limiting bargain hunting. Furthermore, the China-Hong Kong market was weak, US stock futures were somewhat firm, but the Tokyo market continued to trend weakly.
Selling pressure continued in the emerging markets. The Tokyo Growth Market Core Index, consisting of the top 20 stocks by market capitalization in the Mothers Index and Growth Market, started lower and then traded weakly in negative territory. With the US long-term interest rates exceeding 4%, there is a heightened sense of overvaluation in emerging stocks, leading to a challenging environment. However, selective buying interest remains in individual material stocks, with the Mothers Index at a 0.55% decline at the close, a limited decrease compared to the Nikkei Stock Average, and the Tokyo Growth Market Core Index at a 1.66% decline led by top market capitalization stocks.
Now, the US September Consumer Price Index (CPI) announced on the 13th rose by 8.2% year-on-year, surpassing the expected 8.1% increase although it slowed down from August. The Core Index, excluding food and energy, increased by 6.6% year-on-year, a significant acceleration from August, surpassing the expected 6.5% increase. Strong growth was seen not only in housing costs, but also in the food and medical sectors. In addition, in the October University of Michigan Consumer Sentiment Index on the 14th, the expected inflation rate for a year ahead rose significantly to 5.1%, up from September, and for 5-10 years ahead to 2.9%, also higher than in September. Concerns about prolonged inflation have led to a continued rise in US long-term interest rates, reaching 4%.
On the 14th, Bloomberg reported that the president of the San Francisco Fed said that there are signs of cooling in the economy and expressed full support for continuing the interest rate hike to a restrained level. The president suggested that raising the policy interest rate to 4.5-5% is the most likely outcome.
On the other hand, the president of the Kansas City Fed has shown a cautious stance toward a rapid rate hike. He stated that a rapid rate hike could "ultimately cause self-destruction and confuse the financial markets and the economy." Furthermore, it seems that the president of the St. Louis Fed, Blard, made remarks implying the possibility of a rate hike of 0.75 points at both the November and December FOMC meetings, although it is premature to predict the rate hike at this time. Attention will be focused on the rate hike at the November and December FOMC meetings while keeping an eye on the hawkish remarks of future FRB officials.
In addition, the 20th Party Congress of the Communist Party of China opened on the 16th, and President Xi Jinping gave an activity report that outlined the future policy direction. Regarding the Taiwan issue, he asserted that "the wheels of history are moving forward" toward national reunification and stated that he would never promise to abandon the use of force. In the situation in Ukraine, a senior NATO official stated that if Russia were to use nuclear weapons, it would almost certainly trigger a "physical response" from Ukraine's allies and NATO member countries. It is necessary to continue to monitor not only the economic situation of each country, but also geopolitical risks such as the situation in Taiwan and Ukraine.
In last week's column, the author suggested that there is a possibility of a temporary rebound leading to a significant decline in the future. However, amidst various risks seen worldwide, even if there is a temporary rebound towards the end of the year, it is unlikely to be significant. Furthermore, while watching the market with the possibility of a significant decline in the future, it is important to consider the development of the November and December FOMC meetings and other risks, as the market may steadily decline towards the end of the year. Now, the afternoon session of the Nikkei Average is expected to continue trading in a dull and mixed manner. It is worth noting whether the trend of buying emerging stocks as a gap filler will continue while monitoring the movement of U.S. stock futures.
Dollar-yen is holding steady, with continued dollar buying
In the morning session of the Tokyo market on the 17th, the dollar-yen remained steady. The yen strengthened due to concerns about a sharp decline in the Nikkei Average, leading to selling of Japanese stocks, and the dollar temporarily fell to the mid-148 yen level. However, the prevailing trend of dollar buying, driven by expectations of a tightening by the Federal Reserve amid high U.S. inflation, caused the dollar to rebound.
The trading range so far is 148.43 to 148.72 yen for dollar-yen, 144.37 to 144.91 yen for euro-yen, and 0.9720 to 0.9752 dollars for euro-dollar.
Check stocks for the afternoon session
- No. 1 <3562>, BeeX <4270>, and 5 other stocks hit the daily limit.
* Includes temporary daily limit (indication price).
- The top contributor to the decline is Fast Retailing <9983>, followed by SoftBank Group <9984> in second place.
■ Economic Indicators & Official Comments
【Economic Indicators】
- US - September Retail Sales Preliminary: 0% month-on-month (est: +0.2%, August: +0.4%)
- US - September Retail Sales (ex. autos): +0.1% month-on-month (est: -0.1%, August: -0.1%)
- US - September Import Price Index: -1.2% month-on-month (est: -1.1%, August: -1.1%)
• US • University of Michigan Consumer Sentiment Index preliminary value for October: 59.8 (Forecast: 58.8, September: 58.6)
• US • University of Michigan 1-year Expected Inflation Rate preliminary value for October: 5.1% (September: 4.7%)
• US • University of Michigan 5-10 Year Expected Inflation Rate preliminary value for October: 2.9% (Forecast 2.8%, September 2.7%)
• US • August Business Inventories: Month-on-month +0.8% (Forecast: +0.9%, July: +0.5%)
【Key Person's Statement】
• Bailey, Governor of the Bank of England
"Agreement with Rishi Sunak, the new Finance Minister, on maintaining fiscal sustainability immediately"
• Kuroda, Governor of the Bank of Japan
"Continued monetary easing is appropriate."
"The consumer price index is expected to decrease below 2% in the next fiscal year."
<Domestic>
- 13:30 August 3rd Industrial Activity Index (MoM Forecast: +0.3%, July: -0.6%)
- 13:30 August Mining and Industrial Production Revised Value (Flash: MoM +2.7%)
<Overseas>
None in particular
Author: FISCO
Last update: 10/17 (Mon) 12:53
Fisco
Fisco
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