In the morning session on the 23rd, we want to focus on the following three points.

Susceptible to short-term trading influenced by the trend in the foreign exchange market.

No earnings reports.

Main focus of the morning session: Denso, new factory in Aichi, 70 billion yen investment, increased production of ECU boards.

Susceptible to short-term trading influenced by the trend in the foreign exchange market.

In the Japanese stock market on the 23rd, there is a sense of stalemate ahead of important events. However, the buying interest for a dip is likely to be strong, looking beyond the event. In the US market on the 22nd, the Dow Jones Industrial Average was down 177 points and the Nasdaq was down 299 points. There were moments where concerns about the rapid deterioration of the labor market diminished as there were no surprises in the weekly jobless claims, leading to buying. However, the unexpectedly high number of existing home sales in the US led to a rise in long-term interest rates and a shift to selling, especially in the high-tech sector. After that, market participants focused on the speech by Federal Reserve Chairman Powell and there was a dominant trend of position adjustments. The settlement price of Chicago Nikkei 225 futures was 180 yen lower than Osaka, at 38,050 yen. The yen exchange rate is hovering around 146.20 yen per dollar.

It is expected to start slightly bearish as there is some selling pressure due to futures convergence in Chicago. In the US, there is position adjustment ahead of Fed Chairman Powell's speech. However, a rate cut at the September meeting of the Federal Open Market Committee (FOMC) is highly anticipated, so the strength on the downside was being considered. The Nikkei 225 futures were bought up to 38,650 yen during the night session, but then softened after hitting the 75-day moving average at the same level. There were moments where the futures briefly fell below the key level of 38,000 yen, but it managed to keep above it at the closing price.

In the Tokyo market, there is a tendency to refrain from active trading as market participants await Fed Chairman Powell's speech. In Japan, Bank of Japan Governor Uchida will speak during the closed-door sessions of both the House of Representatives and the House of Councillors. In the morning, there will be a hearing at the House of Representatives Financial Affairs Committee, followed by a hearing at the House of Councillors Budget Committee in the afternoon. This is likely to shape the market movement, with market participants paying attention to the impact of Uchida's remarks on the foreign exchange market.

In the current market with limited volume expansion, short-term trading may be influenced by the trends in the foreign exchange market. However, it is possible that the tone of hawkish comments, which is believed to have been one of the causes of the sharp drop in August, will decrease, as the BOJ governor is expected to show a stance of proceeding with interest rate hikes. Given that the yen exchange rate is slightly weaker, with 1 USD = 146 yen, it is also likely that there will be rebalancing movements.

As for speculation, trading related to index ETFs is expected to be the main focus. However, if the yen strengthens, there may be a tendency to buy back export-related stocks. In addition, next week's earnings report by Nvidia is scheduled, which is likely to increase the buying interest in semiconductor stocks.

No earnings reports.

Materials of concern in the morning session

- The Nikkei average is rising (38,211.01, +259.21)

- 1 USD = 146.20-30 yen

- Crude oil futures are rising (73.01, +1.08)

Expectations for inflation to ease in the US.

Active share buybacks

Request for improvement in corporate value by the Tokyo Stock Exchange.

- Denso <6902> to build a new factory in Aichi, investing 70 billion yen to increase production of ECU substrates.

- JFEHD <5411> JFE Steel acquires part of coal mining rights from Nippon Steel and Sumitomo Metal for 162 billion yen.

- Mitsubishi UFJ <8306> Mitsubishi UFJ Bank to make additional investment of 49 billion yen in Indian digital finance.

- Tsubaki Nakashima <6371> Nexaware in the group streamlines logistics warehouse operations with data analysis services.

- Denso <6902> to invest in development resources for the shift to electrification and CASE.

- Toyota Motor <7203> to resume production of "Yaris Cross" and other vehicles on the 2nd of next month.

- Japan Airlines <9201>, Toyota Tsusho, etc. supply biofuel at New Chitose Airport for airport work vehicles.

- JT <2914> acquires a major US tobacco company for 378 billion yen.

- Moriroku Holdings <4249>, Moriroku Technology, refreshes US facilities to improve the profitability of automotive resin components.

- Suncall <5985>, Mr. Nara, increases bus bar production fivefold in Japan and the US.

- Honda <7267> releases a new grade of the 'N-BOX' on its website.

- Autobacs <9832> prevents vehicle theft with a smartphone app that allows engine control.

- Suzuki <7269>, Vice President Kenichi Ayukawa, aims for a 50% market share.

- MinebeaMitsumi <6479> enters the drone antenna market, provides high-precision position measurements.

- NEC <6701>: Verification of AI utilization in finance, jointly with 10 regional banks and others

- NTT <9432>: NTT West Japan releases communication tunnel 'To-toh'

- Osaka Gas <9532>: Panasonic and others start demonstration of control for EV chargers in detached houses, aiming for energy optimization

- Kurabo <3106>: Shinnji Nishigaki establishes new building in Kumamoto, creating synergy

- Achilles <5142>: Rapid replacement and disposal for insider, introduced for medical tents

☆ Schedule of events in the morning session

- 08:30 July National Consumer Price Index (excluding fresh food) (YoY forecast: +2.7%, June: +2.6%)

- 09:30 Governor Ueda of the Bank of Japan attends the closed session of the Diet (House of Representatives Committee on Finance and Financial Affairs)

Not applicable.