Tokyo Market Summary: Nikkei Average Falls for 3rd Day Japan's australian small/mid cap rally short-lived, with interest rates different from the U.S. Trump market fever

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Japanese stocks, reflecting semiconductor concerns as Disco's decline slows down the current performance.
The Nikkei average continued to decline, with a dip below 0.04 million yen due to a significant drop the previous day, prompting buying on dips. However, there are many moves to reduce positions ahead of the full-fledged announcement of earnings reports for the April-June 2024 period, keeping the resistance levels heavy. While short-term overheating remains strong, the upward momentum of Japanese stocks, supported by performance expectations in areas such as semiconductors and the progress of a weaker yen in the foreign exchange market, is beginning to fade.

The short-lived rise of small and mid-cap stocks in Japan, unlike the U.S. booming under the Trump administration, due to different interest rate situations.
The short-lived rise of small and mid-cap stocks in Japan, showing strong movements in line with the investment popularity in the U.S. stock market, may come to an end. With expectations of a rate cut in the U.S. by the end of the year, while the Bank of Japan is exploring the timing of additional rate hikes, the financial policy situations differ, posing a risk of interest rate hikes for financially weak small and mid-cap stocks.

Old-established companies' bankruptcies increased by 90%, surpassing the pace of 'Lehman' from January to June.
On the 19th, Teikoku Databank announced that the number of bankruptcies of old-established companies with more than 100 years of history was 74 cases in the first half of 2024 (January to June), an increase of 90% from the same period last year. This was the highest number since 2000, when statistics could be traced back to the first half. There is a possibility of significantly exceeding the 120 cases in 2008 during the year, which is prominent due to deteriorating profitability caused by high prices and bankruptcies attributed to the absence of successors.

Kono, the Digital Minister, clarified on the 19th after the cabinet meeting that he is not directly requesting a rate hike from the Bank of Japan to correct the weakening yen, in response to Bloomberg's report that suggested he had done so. He explained, 'I think if you watch the video of the interview, you will understand that I am not directly asking the Bank of Japan for a rate hike right now.' He emphasized that monetary policy decisions are made by the Bank of Japan, saying, 'The specific actions are determined by the Bank of Japan.'
Kono Taro, Minister in charge of digital affairs, said at a press conference after the cabinet meeting on the 19th that he is not directly asking the Bank of Japan for a rate hike to address yen depreciation, contrary to the report from Bloomberg suggesting he had requested it. He explained, 'If you watch the video of the interview, I think you will understand that I am not directly asking the Bank of Japan for a rate hike at present.' He stated that monetary policy is determined by the Bank of Japan and said, 'The specifics of what to do are decided by the Bank of Japan.'
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Finance Minister Suzuki 'Be cautious in your statements', criticizes Digital Minister Kono over interest rate hikes.

Real GDP for the fiscal year 2024 lowered to 0.9%, with consumption weakening due to rising prices caused by the weakening yen - government.
At the government's Economic and Fiscal Policy Meeting on the 19th, they indicated that the growth rate of real Gross Domestic Product (GDP) for the fiscal year 2024 is expected to be 0.9%. This is a downward revision from the government's January economic outlook of 1.3%. The prolonged rise in prices due to the weakening yen has impacted private consumption.

Hot stocks
Disco's stock price temporarily fell by 5.1% as net profit falls below market expectations.
$Disco (6146.JP)$Falls for the 3rd consecutive day. It hit a temporary low of 0.05 million 2440 yen, down 5.10%, and has been trading at the lowest level since mid-May for the past 2 months. On the 18th, they announced an expected consolidated net profit for the April-September 2024 period of 46.8 billion yen, a 43% increase from the same period last year, which is below the market expectation of 58.9 billion yen (as of the 18th, 5 companies), triggering a selling spree.

Toyota struggles, limited positive response despite Trump's speech revisiting EV promotion policies.
$Toyota Motor (7203.JP)$Struggles. On the 18th of U.S. time, former U.S. President Trump appeared at the Republican Convention to accept the nomination, once again expressing his intention to review the EV (electric vehicle) promotion policies. Regarding Toyota, which takes an all-round strategy in its lineup, there were market expectations that if the U.S. restrains EV proliferation and adopts a tough stance towards Chinese manufacturers, it would work positively for Toyota's business expansion.

Sumitomo forestry has risen for six consecutive days, advancing on the path of new highs, speculating on the decrease in interest rates and the expansion of housing demand under Trumponomics.
$Sumitomo Forestry (1911.JP)$Rising for six consecutive days, advancing on the path of new highs. In the financial market, there is high interest in the policies advocated by Mr. Trump. With intentions to correct the strong dollar, Mr. Trump is expected to calm down inflation through the expansion of oil production and further pressure the U.S. Federal Reserve for interest rate cuts. For Sumitomo forestry, which has been growing its real estate business in the USA, there is speculation that the business will benefit positively when U.S. mortgage rates decrease along with the interest rate cut, leading to a focus of interest.

JAL continues to show a weak performance in the afternoon session, with a concern about the appreciation of the yen affecting inbound stocks despite the record high number of foreign visitors to Japan in June.
$Japan Airlines (9201.JP)$Ya $ANA Holdings (9202.JP)$Continues to show a weak performance in the afternoon session. $Isetan Mitsukoshi Holdings (3099.JP)$Ya $MatsukiyoCocokara (3088.JP)$Facing resistance on the upside, $Shiseido (4911.JP)$Developing into a lackluster market. The Japan National Tourism Organization announced on the 19th that the estimated number of foreign visitors to Japan in June was 3,135,600. Although it reached a record high as a single month, the willingness to buy based on this data is limited.