Tokyo market summary: Nikkei average depreciation of 291 yen, 10-year government bond yield rises by over 10 bps, Bank of Japan negative interest rate cancellation observations increase

Top news
Spring labor-management negotiations begin, wage increases in line for over 23 years
Keidanren held a labor-management forum in Tokyo on the 24th. Representatives of the labor community, such as coalitions, also participated, and the 2024 spring labor-management negotiations effectively began. Based on rising prices, labor and management are on the same page with the aim of raising wages above 23 years. It will be tested to see if the momentum of wage increases that has developed can be spread to small and medium-sized enterprises.
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The export value was at a record high in '23, and the first deficit of over 100 trillion yen was cut in half
According to the 2023 trade statistics bulletin announced by the Ministry of Finance on the 24th, automobile exports were strong and the export value exceeded 100 trillion yen for the first time, reaching a record high. The import value declined due to high resources. The trade balance after deducting the import value from the export value was in deficit of 9.291.3 billion yen.

10-year government bond yields rise over 10 bps, Bank of Japan negative interest rate cancellation observations increase
In the bond market on the 24th, the yield on new 10-year bonds rose to 0.74%, 10.5 basis points (bp) higher than the closing price the day before (0.635%). The increase has been significant since 2023/12/7 (10.5 bp), when 30-year government bond bidding was historically sluggish. Sales are growing against the backdrop of heightened negative interest rate cancellation observations by the Bank of Japan.
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2024 outlook for semiconductor manufacturing, rushing to start new plants in Japan
In 2024, there will be a rush of operation of new semiconductor plants in various parts of Japan. The first one is Plant 1 of JASM (Kikuyo-cho, Kumamoto Prefecture), which is a subsidiary of Taiwan Semiconductor Manufacturing (TSMC). The Japanese government's “semiconductor fever” is unlikely to subside for a while. As a result of generous subsidies from the government that began in '21, many factories, ranging from quasi-advanced logic semiconductors, memory, power semiconductors, devices, and materials, are being set up.

NEC President Morita, Japanese Generative AI “Combats Major US Companies with Specialized Type”
Generative AI (artificial intelligence) that creates sentences and images is rapidly developing, and it is having a major impact on the economy and society. As overseas players take the lead, where are Japanese IT (information technology) companies winning opportunities for Japanese-generated AI?

Notable stocks
Real estate stocks such as Sumitomo are weak across the board, and Bank of Japan monetary policy normalization observations are burdensome
$Sumitomo Realty & Development(8830.JP)$Ya $Mitsui Fudosan(8801.JP)$、 $Mitsubishi Estate(8802.JP)$The stock price level has all been devalued, and the “real estate business” of the Tokyo Stock Exchange's industry-specific index is high in terms of depreciation rate. In response to Governor Ueda Kazuo's press conference on the 23rd held after the Bank of Japan's monetary policy meeting, monetary policy normalization observations have risen in the market. Long-term interest rates have risen significantly in the bond market on the 24th. For real estate stocks where rising interest rates are expected to have a negative impact on the business side, sales for the purpose of reducing buybacks are dominant.

What is the rate of increase in bank stocks and industry-specific indices since October last year that incorporates the hawkish Bank of Japan
In the Tokyo Stock Market on the 24th, one day after the Bank of Japan's monetary policy meeting, bank stocks rose retrograde amid a general decline in market prices. Domestic interest rates rose sharply in anticipation of the possibility of early cancellation of negative interest rates, and it became a movement incorporating the Bank of Japan's hawkish stance. $Mitsubishi UFJ Financial Group(8306.JP)$It was 4.3% higher at one point, $Sumitomo Mitsui Financial Group(8316.JP)$is 3.2% higher, $Resona Holdings(8308.JP)$Major bank stocks all rose, such as a 3.5% rise. The bank index of the Tokyo Stock Price Index (TOPIX) was 3.1% higher and recorded an intraday rate of increase since 10/31 last year, and out of 78 stocks adopted, only 1 stock has declined.

Sumitomo Hayashi---sharp decline, associated sales due to stock depreciation of US housing giant DR Horton
$Sumitomo Forestry(1911.JP)$There was a sharp decline. DR Horton, an American housing construction company, plummeted in the stock market the day before. The volume of orders received for the October-12 fiscal year was 6.79 billion dollars, which is lower than the market forecast of 6.83 billion dollars. It seems to be an effect of rising mortgage interest rates, and it also suggests a policy to continue sales incentive measures for the time being. The stock price fell 9.2% the day before, and it seems that there are concerns that the effects of the current environmental deterioration will spread to companies that handle housing businesses in the United States.

Daihatsu, 320,000 “cast” etc. have a problem with the Recall Door
Regarding the quality fraud issue at Daihatsu Motor, the company reported a recall of a total of 32,740 units (manufactured from 2015/8 to 23/6) of 2 car models, such as “cast,” to the Ministry of Land, Infrastructure, Transport and Tourism on the 24th, assuming that there is a risk that problems will occur with door locks in the event of an accident collision.

SoftBank G invests in Spanish travel management company
$SoftBank Group(9984.JP)$It has invested in a Spanish travel park that handles corporate business trip management etc. through the SoftBank Vision Fund 2 (SVF2), which is under the umbrella of the SoftBank Vision Fund 2 (SVF2). The investment amount is 104 million dollars (approximately 15 billion yen). The investment was made in collaboration with existing investors in the form led by SVF2. SVF2 will be the fourth new investment in fiscal 2023.