Tokyo Market Summary: Ministry of Finance Considers Bank of Japan Reduction Policy to Shorten the Period for Issuance of Nikkei Average Gains Government Bonds - Proposals

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The Ministry of Finance considers the Bank of Japan reduction policy to reduce the period for issuing government bonds - draft proposals
Based on the reduction policy for government bond purchases by the Bank of Japan, it became known that the Ministry of Finance will proceed with studies in the direction of shortening the period for issuing government bonds. Until now, the period has been extended under a low interest rate environment, but it seems to be a symbolic move for policy changes.

Nikkei average growth sluggish overseas markets reduce investment allocations to Japanese stocks
According to the June institutional investor survey (conducted from 7 to 13) announced by the US BofA on the 18th, the value obtained by subtracting the ratio of “underweight” investors that fall below the ratio of “overweighted” investors holding Japanese stocks was plus 4%, and it was a drastic drop of 16 points compared to the previous month. The average trading price per business day on the Tokyo Stock Exchange Prime Market from the beginning of June until the 18th is below 4 trillion yen. Considering that the January-March period swelled to just under 5 trillion yen, it can be seen that a wait-and-see attitude is spreading among some overseas players. Mr. Koichi Kurose of Resona Asset Management predicts that “as upward revisions to major companies' earnings forecasts for the current fiscal year increase, the Nikkei Average will test 40,000 yen again after September.” The Japanese stock market is heading towards summer when it continues to stand still.

Interest in the Canadian dollar is growing among those who are being questioned about yen sales
We have entered a phase where the “ball selection eye” surrounding the target of yen sales is being questioned in the foreign exchange market. It is a question of which high-interest currency to choose in a “yen carry transaction,” which is procured and managed in yen with a low interest rate. The sharp drop in the Mexican peso at the beginning of this month showed that the sales volume of yen that had accumulated up until now could be reversed by accident. We must also keep an eye on the possibility that interest rate cuts in the US etc. will reduce the interest rate gap with Japan. It's no longer possible to keep selling yen aimlessly.

Bank of Japan April Meeting Summary “Discussion on timing and scope is necessary” for additional interest rate hikes
On the 19th, the Bank of Japan announced the summary of the proceedings of the monetary policy meeting held from April 25 to 26. It was decided to maintain the policy decided at the March meeting, but there was a succession of opinions from the policy committee looking ahead to additional interest rate increases, such as “it is necessary to deepen discussions on the timing and scope of policy interest rate hikes.” There were also indications that “there are various price upward risks” due to depreciation of the yen, labor shortages, etc.
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There are also voices saying that the degree of mitigation will be adjusted before the “accuracy” of the outlook increases = April Bank of Japan meeting

Investment review in a wide range of fields including Norinchukin, stocks and CLO - after processing foreign debt
The Norinchukin Bank will consider investing in a wide range of assets such as domestic and foreign stocks and project finance after selling foreign bonds equivalent to 10 trillion yen held during the current fiscal year. Reconstruct portfolios that are biased towards foreign debt.

Notable stocks
Nidec - Mr. Mamoru Takanaga aims for 1 trillion yen related to AI “President Kishida is real” = Nikkei
$Nidec (6594.JP)$is significantly higher. The morning edition of the Nihon Keizai Shimbun dated 19th reported that the company held a general shareholders' meeting on the 18th, and that Nagamori Shigenobu, Representative Director and Global Group Representative, talked about the management system centered on President and Chief Executive Officer (CEO) Mitsuya Kishida, who took office on 4/1, “Choosing 2 or 3 successors failed, but this time it's real.”

Subaru's general shareholders' meeting, President Atsushi Osaki “steadily advancing electrification”
$Subaru (7270.JP)$An ordinary general meeting of shareholders was held in Shibuya-ku, Tokyo on the 19th. President Atsushi Osaki said, “The spread of electric vehicles (EVs) gradually progresses with repeated acceleration and deceleration. We will steadily advance electrification efforts,” and asked for understanding of management policies that focus on EVs. Subaru has set a goal of increasing the sales ratio of electric vehicles to 50% in 2030. In addition to starting EV production around 25 at the Yashima Plant in Ota City, Gunma Prefecture, a dedicated EV line will be in operation at the Oizumi Plant after '27. President Osaki touched on the fact that production of hybrid vehicles (HVs) will also proceed in parallel in Japan and the US, and explained that “preparations are underway so that flexible production with EVs, HVs, and gasoline vehicles can be produced in both Japan and the United States.”

New organization with 20 companies including Suzuki to standardize in-vehicle software
$Suzuki Motor (7269.JP)$and semiconductor manufacturer's $Renesas Electronics (6723.JP)$Approximately 20 companies, etc. will cooperate to standardize in-vehicle software. We will participate in a new organization launched by Nagoya University, which leads in-vehicle software research, and jointly develop it. Competition with overseas players is fierce over the digitalization of cars. Cooperate to reduce development costs and compete against overseas players.

Shiseido --- Be wary of the effects of a sharp decline in Chinese consumption
$Shiseido (4911.JP)$has continued to decline drastically. The consultancy company Bain announced yesterday that this year's worldwide sales forecast for luxury goods for individuals will increase by 0-4% compared to the previous year. It seems that growth is expected to be sluggish since 2020. The deceleration is most prominent in China, and it is pointed out that those who can buy luxury goods are also refraining from actively purchasing.
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Isetan Mitsukoshi - sharp drop, growth forecasts for luxury goods sales are sluggish, and it is reported that China's wealthy are refraining from buying