The Nikkei average fell, ending the morning trading session at 38,101.24 yen (with an estimated trading volume of 0.76 billion shares), down 367.39 yen (-0.96%) from the previous day.
On the 29th, the US stock market was mixed. The Dow Jones Industrials Average fell 49.41 points (-0.12%) to 40,539.93, the Nasdaq rose 12.32 points (+0.07%) to 17,370.20, and the S&P 500 rose 4.44 points (+0.08%) to 5,463.54. Encouraged by good corporate earnings, buying continued after the opening, pushing the market up. However, with no major economic indicators announced and concerns about the upcoming Federal Open Market Committee (FOMC) meeting, the market lacked momentum and was pushed down by selling. The Nasdaq remained bottomed up, supported by strong expectations for earnings reports from major tech companies. Dow fell due to the recoil from a sharp rebound the previous day. The metal products, textiles & apparels, and banking sectors fell while the real estate and transportation equipment sectors rose.
While US stocks were mixed, the Tokyo market opened with a selling bias due to the recoil from the sharp rebound yesterday. Although the Nikkei average maintained the 38,000 yen level, the market remained cautious due to the Bank of Japan's monetary policy decision meeting being held from today until tomorrow, limiting the scope of buying the dips. The market gradually extended its decline, and more than 80% of all stocks on the Prime market declined, leading to an overall downward trend. Among the Nikkei average component stocks, Komatsu <6301> was sold due to the slowing growth of profit in the first quarter earnings, and Rakuten Group <4755>, which postponed the restructuring of its financial business from October of this year to January of next year, also fell. Bank stocks such as Shizuoka FG <5831>, Chiba Bank <8331>, Fukui Financial G <8354>, and Sumitomo Mitsui Bank <8316> were also lackluster due to the decline in interest rates. Other stocks that fell include Shionogi-Synthelabo Pharma <4507>, Disco <6146>, Sociomaterials <6526>, and Nitori Holdings <9843>.
Meanwhile, Fanuc <6954>, which raised its full-year outlook more than expected due to better-than-expected Q1 orders, was bought, as well as real estate stocks such as Mitsui Fudosan <8801>, Sumitomo Realty & Development <8830>, and Mitsubishi Estate <8802>, which were solid due to the decline in interest rates. Other strong performers included Omron <6645>, Chugai Pharmaceutical <4519>, JTEKT <6471>, Sony Group <6758>, and Nissan Motor <7201>.
By sector, mining, banking, machinery, metal products, and textiles & apparels industries fell, while only the real estate and transportation equipment sectors rose.
First Retail <9983> was the top contributor to the decline in stock prices, pushing the Nikkei average down by about 88 yen with just one stock. Second was Tokyo Electron <8035>, followed by Softbank G <9984>, Shin-Etsu Chemical <4063>, Advantest <6857>, Disco <6146>, and Shionogi <4507>. On the other hand, Fanuc <6954> was the top contributor to the rise in stock prices, pushing up the Nikkei average by about 22 yen with just one stock. Second was Chugai Pharmaceutical <4519>, followed by Recruit HD <6098>, Sony G <6758>, Kyocera <6971>, Omron <6645>, and Nippon Electric <6988>.
Although the exchange rate is slightly moving at 153.90 yen/dollar, the benchmark for long-term interest rates, the yield on 10-year government bonds, has fallen to 1.015%, dropping for the fourth consecutive day. With the announcement of the results of tomorrow's Bank of Japan meeting approaching, there is a growing sense of tension in both the foreign exchange and interest rate markets. In the afternoon of the Tokyo market, although the focus will be on the foreign exchange and interest rate markets, there may be a scene where the Nikkei average falls below 38,000 yen as there is reluctance to actively buy on dips.