In the afternoon trading on the 10th, the following three points should be noted.

Nikkei average continues to rise slightly, concerns about downside support turn the market around.

Dollar-yen is slightly firm, watching US interest rates.

Top gainers are First Retail＜9983＞ and Softbank G＜9984＞.

Nikkei average continues to rise slightly, concerns about downside support turn the market around.

The Nikkei average rose slightly. It closed at 41,635.53 yen (volume approximately 0.85 billion shares), up 55.36 yen (+0.13%) from the previous day.

US stocks were mixed on the 9th. The Dow Jones Average fell 52.82 dollars (-0.13%) to 39,291.97 dollars, the Nasdaq rose 25.55 points (+0.14%) to 18,429.29, and the S&P 500 rose 4.13 points (+ 0.07%) to 5,576.98 after trading. In anticipation of testimony from Powell, Chairman of the Federal Reserve Board (FRB), the market remained watchful and trading was mixed after the start of trading. Due to the mention of recent data showing a slowdown in the economy and labor market in his testimony, the Dow turned downward due to caution. In contrast, the Nasdaq continued to buy high-tech products, and updated its record high for the 6th consecutive time, ending mixed.

In the midst of mixed ups and downs in US stocks, the Tokyo market opened with selling pressure as profit-taking followed the sharp rise yesterday. Semiconductor stocks showed a weak trend, but financial stocks such as insurance, banks, and securities were generally bought, and the Nikkei average rebounded. Although it did not update the all-time high during trading hours (41,769.35 yen on July 9th), it was well-supported by the resilience of the downside.

In the Nikkei average adopted stocks, Mitsubishi Motors＜7211＞ rose significantly due to expectations of an upward investment judgment by US securities companies; insurance stocks Tokyo Marine＜8766＞ and MS&AD＜8725＞ updated their record highs since listing (considering split); and T&D Holdings＜8795＞ set a new record high for the year. In addition, Sapporo HD＜2501＞, Suzuki＜7269＞, HOYA＜7741＞, and Mitsukoshi Isetan＜3099＞ were bought.

On the other hand, although it revised its medium-term management plan and raised its operating profit for the fiscal year ending March 2026 to 46 billion yen, GS Yuasa＜6674＞ widened its decline because it did not meet market expectations, and Mitsubishi Heavy Industries＜7011＞ continued to fall. In addition, semiconductor stocks such as Laser Tech＜6920＞, Socionext＜6526＞, and Screen Holdings＜7735＞ also did not perform well.

In terms of industry, insurance, securities and commodity futures trading, precision instruments, banking, and marine transportation increased, while machinery, warehousing and transportation-related industries, real estate, wholesale trade, pulp and paper declined.

The exchange rate is hovering around 161.50 yen per dollar, with a tendency for a weaker yen and stronger dollar compared to the previous day. With Powell FRB's congressional testimony having been almost the same as previous statements, anticipation for an early rate cut has faded. The yield on 10-year US government bonds in after-hours trading is slightly up at 4.30%. Powell FRB's congressional testimony will also be given tonight, but it is expected that "data dependent" stance from last night will remain and will not be considered as a factor.

Yesterday's Tokyo market is said to have induced buying back of futures due to high expectations for Powell FRB's congressional testimony, but expectations for an early rate cut have retreated contrary to those expectations. Nevertheless, the Nikkei average and TOPIX remain at record highs. The background to the sharp rise yesterday is not only due to short covering, but also because some investment funds flowed in. There are also rumors that oil money, mainly large-cap stocks, has flowed in. The Nikkei average and TOPIX in the afternoon can also be expected to rise slightly.

The dollar-yen is slightly firm, watching US interest rates.

During the morning of the 10th in the Tokyo market, the dollar-yen had a small and steady movement, rising from 161.26 yen to 161.59 yen. The decline in the US 10-year bond yield on the previous day's overseas market rebounded and the repurchase of the dollar strengthened. Additionally, the Nikkei stock average secured a plus, which supported the dollar with yen selling.

The trading ranges so far are as follows: dollar-yen from 161.26 yen to 161.59 yen, euro-yen from 174.40 yen to 174.73 yen, and euro-dollar from 1.0811 dollars to 1.0817 dollars.

Check stocks for the afternoon session

11 stocks, including Regional Newspaper Society <2164> and Sea Vee Es Bay Area <2687>, hit a daily limit up.

*Includes temporary stopper (indicated price)

First Retailing <9983> topped the list of gainers, followed by Softbank Group <9984>.

Economic indicators and remarks by important people

[Economic indicators]

Japan's domestic corporate goods price index for June rose by +2.9% year-on-year (forecast: +2.9%, May: +2.6% << +2.4%).

China's consumer price index for June rose by +0.2% year-on-year (forecast: +0.4%, May: +0.3%).

China's producer price index for June fell by -0.8% year-on-year (forecast: -0.8%, May: -1.4%).

[Important Person's Remarks]

Reserve Bank of New Zealand (Statement)

"Agree on the need for monetary policy to remain restrictive"

"Risk of short-term inflation sustained domestically"

- 16:30 Bond market participant meeting (institutions, BOJ)

Not applicable.