Tokyo Market Summary: The Nikkei Average recovered to the 40,000 yen range, bought into financial stocks, and TOPIX is at a high price for the first time in 34 years

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If 1 dollar = 170 yen is also visible, if the reduction in Bank of Japan government bond purchases is small - Vanguard
US Vanguard believes that if government bond yields are not boosted by policy revisions that are expected to be announced by the Bank of Japan at the July monetary policy meeting, there is a risk that yen will fall towards 1 dollar = 170 yen. The dollar has broken through 161 yen, and the depreciation of the yen has progressed to the level since 1986, but 170 yen could be the next major milestone.

10-year government bond surface interest rate raised to 1.1% to the level before cross-dimensional mitigation
On the 2nd, the Ministry of Finance raised the surface interest rate, which indicates interest paid to buyers every year, from 1.1% and 0.8% until June in the 10-year government bond (375 bonds) bid issued in July. This is the first time in about 12 years since 2012/4 that surface interest rates have reached the 1% range. Reflecting the rise in government bond yields against the backdrop of the Bank of Japan's policy revision observations, it was the level before the Bank of Japan began cross-dimensional mitigation in 13/4.

Global maritime transport will increase drastically this year since 2010 - Red Sea diversion will have an impact
The index showing global maritime transport is trending to be the biggest increase since 2010. The background is that they have been forced to change to a detour (bothersome) route with a long transportation distance due to merchant ship attacks in the Red Sea.

Bank of Japan's government bond purchases reduced by 4.65 trillion yen in the 1st year and 3.55 trillion yen in the 2nd year = financial institution survey
When Reuters conducted a questionnaire survey targeting major financial institutions regarding the reduction range of government bond purchases by the Bank of Japan, it became clear that they anticipated an average reduction of 16.1 trillion yen in the first year and 29.3 trillion yen in the second year. Divided by the number of months, it is calculated that the monthly purchase amount will decrease from the current approximately 6 trillion yen to 4.65 trillion yen for the first year and 3.55 trillion yen for the second year.

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Mitsubishi UFJ stock is high for the first time in 18 years, profit margins and improvement expectations due to rising Japan-US interest rates
$Mitsubishi UFJ Financial Group(8306.JP)$It continued to increase for 7 days. It rose to 1814 yen, which temporarily rose by 3.71%, and hit a high for the first time in about 18 years since 2006 on a basis that took stock splits into account. The US long-term interest rate temporarily rose to 4.49% in the New York market on the 1st, to a level for the first time in about a month. Long-term interest rates also rose in the domestic bond market on the 2nd, and bank stocks are being bought due to profit margins and expectations for improvement. $Sumitomo Mitsui Financial Group(8316.JP)$Ya $Mizuho Financial Group(8411.JP)$In addition to, $Dai-ichi Life Holdings(8750.JP)$Ya $MS&AD Insurance Group Holdings(8725.JP)$Insurance stocks such as these are also expensive.
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Bank stocks such as Mitsubishi UFJ strengthen their upward price orientation, and upward pressure on long-term US interest rates due to “almost tiger” awareness ◇

Shipping stocks such as Kawasaki Motors ride the rising tide, and become a sharp spearhead of value stock prices due to the recovery in shipping market conditions ◇
$Kawasaki Kisen Kaisha(9107.JP)$There was momentum in the rise, and the high price was updated today with an 8% rise following the drastic high the day before. Other than this, $Nippon Yusen Kabushiki Kaisha(9101.JP)$Ya $Mitsui O.S.K. Lines(9104.JP)$etc. also clearly showed an upward price orientation, and the return of funds to shipping stocks has become conspicuous. Generally, a movement to review value stocks has become apparent, and investment money is also moving the index finger in the shipping sector, which is a treasure trove of low PBR stocks.

The increase in Honda stock rapidly shrank, and it was reported that it was sold on a scale of 500 billion yen, mainly by major non-life insurance companies
At the stock market on the 2nd $Honda Motor(7267.JP)$Stock gains were rapidly shrinking at the end of the market. It had risen to 1801.5 yen, which was 2% super high at one point, but the increase was reduced to close to the closing price the previous business day in response to Reuters reports that the four major non-life insurance companies had solidified policies to sell Honda stock.

Sekisui House is issuing large subordinated bonds, and Japanese companies are issuing yen bonds at a record pace
$Sekisui House(1928.JP)$The conditions for issuing large subordinated bonds were decided on the 2nd. As observations spread that the Bank of Japan would raise additional interest rates, corporate bonds were issued at a record pace in the domestic market. Companies are moving to secure funds before interest rates rise due to the Bank of Japan's pre-emptive view of interest rates associated with the normalization of monetary policy. Takeda Pharmaceutical and Nippon Steel issued hybrid bonds in June. According to Bloomberg data, the total amount of corporate bonds issued by domestic companies in the first half of 2024 reached a record high of about 7.8 trillion yen for the same period.

Distribution source: Bloomberg, Nihon Keizai Shimbun, Reuters, MINKABU