The Nikkei Average continues to fall, Ueda's unwavering belief at 2% “will move all at once” if you are sure

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Ueda Bank of Japan's unwavering belief at 2% “will move all at once” if you are sure
It will be half a year in 9 days since Mr. Kazuo Ueda took office as the governor of the Bank of Japan. In July, the management of long and short interest rate manipulation (yield curve control, YCC) was made flexible, and they also began referring to the exit from monetary easing that former Governor Kuroda Higashihiko had been talking about. How do we proceed with the final stages of the battle against deflation that has continued for a quarter of a century? Decipher it from the half-year trajectory.

How to sell US bonds even if government shutdown is avoided, and the Fed's view of “maintaining hawkish faction”
The shutdown of some US government agencies was avoided at the last minute. The view that government shutdown was “negative” to the creditworthiness of US bonds was a burden on bond exchange rates until the previous weekend, but government bond sales accelerated in the US bond market on the 2nd after being avoided. Views spread that it would be easier for the US Federal Reserve (Fed) to maintain a hawkish stance because the immediate closure was avoided.

Weakening yen, boosting performance ahead of September short-term improvements, and concerns about high costs
Business sentiment continues to improve. In the September nationwide enterprise short-term economic observation survey (short term economic observation survey) announced by the Bank of Japan on the 2nd, not only the large enterprise manufacturing industry, where supply restrictions have been lifted and the depreciation effect of the yen has been strongly shown, improved not only in the manufacturing industry, but also in the non-manufacturing industry due to an increase in visitors to Japan. There is uncertainty about the future, such as China's economic risks, etc., but if companies whose performance has been boosted by the depreciation of the yen become positive about raising wages, it will sprout a virtuous cycle of price and wage increases.

Domestic new car sales, April-September 16% increase, Toyota 30% increase, driving
The number of new car sales (including light vehicles) in Japan from April to September 2023, which was announced by the automobile sales industry group on the 2nd, was 2.22 million units, up 16% from the same period last year. There was an improvement from the same period last year when car production was delayed due to a shortage of semiconductors, but compared to fiscal year 19 before the novel coronavirus disaster, it has only decreased by 15%. By brand $Toyota Motor(7203.JP)$(Excluding Lexus) led the way with a 30% increase from the same period last year. $Honda Motor(7267.JP)$It also increased 2% from the same period last year, $Nissan Motor(7201.JP)$It was an 11% increase.

Global M&A, April-September, 20% interest rate hikes and future unease resonate
There is a sudden brake on corporate M&A (mergers and acquisitions) around the world. The total amount of M&A transactions from 2023/4/9 was about 1.19 trillion dollars (about 180 trillion yen), down 24% from the same period last year. The negative for the same period continued for 2 years in a row. It has continued to shrink since the 21/4/9 fiscal year, which hit a record high due to economic resumption from the novel coronavirus disaster. Funding costs were high due to uncertainty about the future of the world economy and interest rate hikes, and companies became cautious about making new investments.

Mitsubishi UFJ enters real estate subordinated loans Mitsubishi Corp. and funds
$Mitsubishi UFJ Financial Group(8306.JP)$Mitsubishi UFJ Bank, which is under its umbrella, will enter into subordinated loans for real estate. $Mitsubishi(8058.JP)$The subsidiary Diamond Realty Management (Tokyo, Chiyoda) will contribute 5 billion yen to a fund with a total amount of 11 billion yen managed by the subsidiary Diamond Realty Management (Tokyo, Chiyoda) so that it can be provided in projects where it handles loans on its own.

Recruit HD - Rebound TOB TOPPAN is scheduled to apply for 4148 yen per share
$Recruit Holdings(6098.JP)$There was a backlash. The company announced on the 2nd that it will carry out a tender offer (TOB) of treasury stock. The TOB price is 4148 yen per share. The purchase period is from 10/3 to 10/31. The planned number to be purchased is 13 million shares. It is the company's major shareholder $Toppan Holdings(7911.JP)$is scheduled to apply.

Is the continued depreciation of the yen realistic for Japan to leave its own currency? Is it a new cause for intervention
The trend of yen depreciation and dollar appreciation continues in the foreign exchange market. The movement to search for the psychological milestone of 1 dollar = 150 yen due to a sense of caution against exchange intervention in yen purchases by the Japanese government and the Bank of Japan is extremely slow, and it is a troubling situation for authorities that advocate “preventing excessive fluctuations.” However, the composition where there are few factors that can stop the depreciation of the yen other than intervention has not changed. Observations that “if the Japanese government continues to sit idly by, capital flights (capital flight) from Japan may accelerate” are slowly spreading in the market.

There is a possibility that Governor Mester will need to leave it unchanged for a while with additional interest rate hikes by the end of the year
President Mester of the US Cleveland Fed expressed the view on the 2nd that in order to return the inflation rate to the target of 2%, there is a large possibility that it will be necessary for the financial authorities to implement an additional interest rate hike once more by the end of the year and then leave it unchanged at a high level for a while.

ー MooMoo News Sherry
Distributors: QUICK Money World, Nihon Keizai Shimbun, Bloomberg, Traders Web