Nikkei average starts with a 129 yen decrease, Japan's fear index at a record high, cautious of a double-bottom.

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Market Overview
In today's Tokyo stock market, the Nikkei Stock Average started at 36,029.90 yen, down 129.26 yen from the previous trading day, and the TOPIX started at 2563.27, down 13.27 points.

Top News
Japan's stock market fear index at the highest level in the world, investor caution continues = Bloomberg.
- The expected volatility of Japanese stocks is at the highest level in the global stock market. The Nikkei Volatility Index (Nikkei VI) recorded 85 in early August and has since remained high at around 27.
- The Nikkei VI is higher than the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) in the United States and the HSI Volatility Index in the highly volatile market of Hong Kong.
- The expected volatility remains high due to the uncertainty of monetary policies in Japan and the United States, as well as important political events such as the presidential election and the Liberal Democratic Party leadership election.
- According to Masanari Takada, a quant strategist at JP Morgan Securities, limited flow of panicked stop-loss selling occurred in this stock price decline because investors had purchased put options in advance to prepare for a market crash.

Easing of pressure for rising yields due to increased buying of domestic government bonds by domestic investors
- While the Bank of Japan is reducing its purchases of government bonds, domestic investors are buying more government bonds, thereby mitigating the upward pressure on bond yields. Domestic investors purchased a net total of 32.2 trillion yen in government bonds in the 12-month period up to August.
The increasing demand for government bonds from the private sector alleviates concerns that the Bank of Japan's reduction in purchases will lead to a sharp rise in government bond yields. The Bank of Japan may strengthen its confidence that the government bond market will not collapse even as it reduces its purchases and raises the policy interest rate.
Mitsubishi UFJ Financial Group's executive officer, Hiroshi Seki, sees the level of 10-year government bond yields and the Overnight Index Swap (OIS) interest rates rising above 1.2% as a perspective to start real investments.
Arif Hussein of T. Rowe Price believes that with the rise in Japanese government bond yields, there is a high likelihood of funds returning to Japan, and he prefers an overweight allocation.

The Bank of Japan is expected to maintain its policy at this month's meeting, with no urgent need for interest rate hikes, according to sources.
According to Bloomberg, the Bank of Japan is highly likely to maintain the current level of unsecured call overnight interest rates at around 0.25% at the monetary policy decision meeting on the 19th and 20th. This is believed to be in order to assess the impact of the rate hike in July and the subsequent instability in the financial market.
After the rate hike in July, concerns about the US economy intensified, leading to significant correction of the yen depreciation and sharp decline in domestic stock prices, causing market instability. According to officials, the Bank of Japan is closely monitoring the nervous state of the market and judging that there is a low necessity for another rate hike.
Deputy Governor Uchida stated that the Bank of Japan will not raise interest rates in an unstable financial capital market. Deputy Governor Himino also stated that monitoring market trends with a high sense of tension is his primary job.
According to economists' surveys after the market's rapid fluctuations in August, the majority of expectations for the next rate hike by the Bank of Japan is in December, with 41% predicting so, and 21% predicting a rate hike in January of next year.