Tokyo market summary: Nikkei average rebounds, KADOKAWA surges 23%, Sony Group Corp rumored to be in acquisition talks.

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The dollar-yen has fallen below 154 yen, with the yen being bought due to expectations of a Bank of Japan rate hike in December and Finance Minister Kato's restraining remarks.
The dollar-yen is falling below the 154 yen level. Although Governor Ueda's speech yesterday was not hawkish, it was not dovish either, and the probability of a rate hike at the December meeting remains almost unchanged. In the Overnight Index Swap (OIS) market, the probability of a rate hike in December is holding in the 50% range. Governor Ueda's speech is scheduled again on the 21st, attending the Paris Europlace 'Financial Forum' with a planned Q&A session. Finance Minister Kato stated that appropriate measures will be taken in response to excessive movements, including speculative activity, keeping a very high degree of tension while monitoring the market. Given the sharp movements seen since the end of September, the dollar-yen briefly fell below the 154 yen level, as a restraining measure.
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Key remarks: Minister of Finance Kato "Responding appropriately to rapid exchange rate fluctuations."

Goldman Sachs sees even brighter prospects for Japanese stocks.
Three members of Goldman Sachs' Japan Strategy Team point out that the outlook for the Japanese stock market is brightening. The members explain, 'With the US presidential election results confirmed and the TOPIX approaching our target of 2700, risks are tilting upwards.' They state that in 2025, solid macroeconomic momentum, improved policy transparency, and the continuation of Japan's structural reforms will likely offset negative factors such as political uncertainty.

One reason for the acquisition proposal of Seven & I Holdings by SMBC Nikko Securities is the low profitability.
At SMBC Nikko Securities, $Seven & i Holdings (3382.JP)$There has been a new development in the battle for control at Seven & I Holdings with a management buyout proposal by the founding family, triggered by the acquisition proposal from Canadian Alimentation Couche-Tard. It is pointed out that the background of the acquisition proposal by Alimentation Couche-Tard was the low profitability of Seven & I Holdings. While Seven's actual ROE is 6.25% and actual ROA is 2.12%, Couche-Tard's actual ROE is 20.97% and actual ROA is 8.18%. SMBC Nikko believes that if the profitability gap is the background of the acquisition, there is no other way to prevent it than to increase profitability. Due to the opposition of many institutional investors to takeover defense measures, it is deemed unrealistic for large cap stocks to implement them, especially commentators point out that in the case of large cap stocks, overseas companies are expected to be the main acquirers, so the target should be foreign companies in the same industry.

Hot stocks
Kadokawa soars in the afternoon session, with rumors of acquisition talks with sony group corp◇
$Kadokawa (9468.JP)$is surging in the afternoon session. On the 19th, Reuters reported that $Sony Group (6758.JP)$is in talks for the acquisition by Kadokawa, which seems to have triggered buying. According to the report, if the negotiations are successful, the contract is expected to be finalized within a few weeks.
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Bandai Namco Holdings plunges sharply as Sony Group Corp is reported to be in acquisition talks with Kadokawa, raising concerns about the impact on "Elden Ring".

Nippon Steel surged with a large sum of funds inflow, riding the wave of defense-related stocks popularity due to the Trump effect, hitting a year-to-date high.
$The Japan Steel Works (5631.JP)$Experienced a surge in trading volume, ranking second in the upward price movement in the main board market, gaining popularity. The rotation of money into defense-related sectors due to the Trump effect is reigniting, with a notable influx of investment capital towards related stocks centering on Mitsubishi Heavy Industries in the Tokyo market.

Metapla continued to surge, adding additional purchases of bitcoin.
$Metaplanet (3350.JP)$Continues to surge. Around noon, it was announced that they purchased an additional 1.75 billion yen worth of Bitcoin, viewed as positive news. The number of Bitcoins purchased was 124.117, with an average purchase price of 14,099,600 yen per Bitcoin. With this additional purchase, the company now holds 1,142.287 Bitcoins.