Clue Amid material difficulties, the Nikkei Average is stuck, and the small to medium market prices are standard and growth

The Nikkei Average fell to 38596.47 yen last week, weakening 218.09 yen (-0.56%) per week. The Tokyo market at the beginning of the week depreciated completely due to European political unease surrounding the French and British elections, and the Nikkei Average temporarily entered the 37,000 yen range, but prices returned in response to the calming of European political unease. However, due to lack of clues and materials, the Prime Market trading price on the 20th hit 3.17 trillion yen, which hit a low this year, and business was quiet throughout the week. Developments where the Nikkei Average was conscious of the 25-day moving average level as upper price resistance continued.

While there are many days when trading prices on the Prime Market in June remain in the 3 trillion yen range, there are no prominent sales, and the Nikkei Average continues to be flat, centered around 38500 yen. It seems better to watch that the “summer withering market” has already entered. If large stocks in the prime market are difficult to move, let's focus on the standard market or growth market. Last week, around TOPIX's new reform plan announced by JPX Research Institute on the 19th, it was newly incorporated into stocks with large market capitalization in the standard market and growth market, etc., and speculative purchases were made with expectations. According to the reform plan, a total of about 50 stocks are scheduled to enter from the standard market and growth market, so it can be expected that major stocks, etc. with large market capitalization in both markets will move steadily for a while. Above all, I would like to pay attention to the growth market index core 20 stocks, etc. since stocks with a strong rebound trend are scattered.

The depreciation of the yen and appreciation of the dollar is progressing, with the exchange rate rising to 159 yen 80 yen per dollar in overseas time on the 21st. The situation is that the 160 yen mark on April 29 is also close at hand. The US Treasury Department released a semi-annual foreign exchange policy report on the 20th, and Japan was added to a “monitoring list” that closely monitors exchange rate operations. This is because the total amount of current account surpluses exceeded formal standards in 2023, which was the current target period, due to the current decline in crude oil prices, and there were no words condemning the exchange intervention of 4/5/24. However, in response to entering the surveillance list for the first time in a year, it can also be viewed that yen buying intervention by the government and the Bank of Japan has become difficult to implement. This week, it seems that we will see a scene where the exchange rate responds sensitively to statements made by government officials such as Finance Minister Kanda and Minister of Finance Suzuki. If the sense of caution against yen buying intervention by the government and the Bank of Japan abates, there is also a possibility that speculators will build up yen selling positions.

The acceleration of the depreciation of the yen and appreciation of the dollar is likely to be a tailwind for stocks with a high overseas sales ratio, but now that interest in Japanese stocks is on a downward trend, such as foreign investors refraining from aggressive trading, etc., the Bank of Japan's monetary policy assessments etc. have become heavy, and I don't think it will be a tailwind like at the beginning of the year. The mood to determine the results of the “bond market participant meeting” to be held on 7/9 and 10 continues, and it feels like the upper prices of the Nikkei Average and TOPIX will become heavy. It will be a tailwind for small and medium-sized yen depreciation merit stocks that individual investors handle the most.

Sales dominance continued due to the fact that the current fiscal year's ordinary profit forecast declined, etc., but it seems that the decline will finally stop. Since global semiconductor market conditions from 2024 to 25 are expected to improve, earnings forecasts for the current fiscal year can also be viewed as conservative.

Because it is 4th in the standard market capitalization ranking (481.1 billion yen as of the 21st)TOPIXIt is assumed that speculative purchases of reform proposals are easy to face. As the backlash from the year-to-date low is intensifying, sales etc. from overseas goods sales etc. are extremely high, so I would like to pay attention as a stock merit of yen depreciation.

Stocks that have adopted the Growth Market Core Index are testing a rebound from the low listing price area. Since the total market value is large (143.1 billion yen as of the 21st)TOPIXIt is assumed that speculative purchases of reform proposals are easy to face. Since we anticipate a surplus for the fiscal year ending 25/6, I expect a review and purchase.