In the afternoon trading on the 18th, we should pay attention to the following three points.

- The Nikkei average rebounded, holding back from active buying before the FOMC.

- The dollar-yen is weak, with selling pressure on the dollar in anticipation of a rate cut by the US.

- The top contributors to the price increase are First retail <9983>, with the second spot going to Advantest <6857>.

The Nikkei average rebounded, holding back from active buying before the FOMC.

The Nikkei Average rebounded. It closed the morning trading session at 3.461.44 yen (+ 0.71%) higher than the previous day's price of 258.22 yen (with a volume estimate of about 0.74 billion 40 million shares).

The U.S. market was mixed on the 17th. The Dow Jones Average closed at 41.606.18 yen, down 15.90 dollars (-0.04%), the Nasdaq closed at 17.628.06, up 35.93 points (+0.20%), and the S&P 500 closed at 5.634.58, up 1.49 points (+0.03%). The market initially rose in expectation of a rate cut at the FOMC meeting, but retreated slightly as August retail sales were stronger than expected. The market was cautious ahead of the FOMC and struggled to gain momentum. Profit taking was seen in the Dow Jones from near an all-time high, leading to a decline. The Nasdaq was supported by expectations of lower interest rates and ended mixed.

The U.S. stock market lacked direction with mixed highs and lows, but the Tokyo market started to buy back due to the depreciation of the yen and the appreciation of the dollar to the 142 yen level. The Nikkei Average rebounded, but the upward momentum slowed down at the previous day's high of 36,600 yen and gradually narrowed its gains. There was a strong sense of caution ahead of the FOMC announcement scheduled for 3:00 a.m. Japan time on the 19th, and buyers held back.

In the stocks included in the Nikkei Average, resource-related stocks such as Sumitomo Metal Mining (5713) and Mitsubishi Materials (5711) were bought due to the continuous increase in the price of NY gold for three consecutive trading days. In addition, automotive-related stocks such as Mazda (7261), Toyota Motor (7203), Hino Motors (7205), Honda (7267), and Suzuki (7269) rose on the material of the weakening yen. In addition, Credit Saison (8253), T&D Holdings (8795), and Resona Holdings (8308), which were sold off yesterday, rebounded.

On the other hand, IHI (7013), which set a new high for the year in the morning, continued to decline, and Mitsubishi Heavy Industries (7011), another defense-related stock, was also sold off. In addition, railway stocks such as Keio Electric Railway (9008), Odakyu Electric Railway (9007), Tobu Railway (9001), Keisei Electric Railway (9009), and JR West Japan (9021) all fell. Mitsukoshi Isetan (3099), Chugai Pharmaceutical (4519), and Kao (4452) were also sold off.

In terms of industry sectors, transportation equipment, petroleum and coal products, warehouse and transportation-related businesses, rubber products, and iron and steel all rose, while land transportation, air transportation, pharmaceuticals, food, and fisheries and forestry all fell.

The exchange rate has shifted to a stronger yen and weaker dollar by about 80 yen compared to the morning, with the dollar at around 141.40 yen. As a result, the recovery of Japanese stocks has slowed down. In the afternoon Tokyo market, which is still dependent on the exchange rate, it is important to be aware that there is a possibility of the gains being erased. The trading volume in the morning prime market remained at 1.6 trillion yen, and there was a cautious mood ahead of the FOMC announcement. The afternoon is also expected to be a sluggish market.

The dollar-yen is weak, with a focus on a US rate cut and dollar selling.

During the morning session in the Tokyo market on the 18th, the dollar-yen was on a weaker tone, dropping from 142.39 yen to 141.38 yen. Expectations of a significant rate cut by the Federal Open Market Committee (FOMC) resulted in a prevailing trend of dollar selling early in the morning. The Nikkei average stock price rebounded but the gains narrowed, which restrained yen selling.

The trading ranges so far are: 141.38 yen to 142.39 yen for the dollar-yen, 157.32 yen to 158.23 yen for the euro-yen, and 1.1113 dollars to 1.1130 dollars for the euro-dollar.

Check stocks for the afternoon session

Stocks such as Immunobiological Research Institute <4570> and Nyle Immune Biotech <4893> have hit the daily limit.

*Includes temporary stopper (indicated price)

The top contributor to the price increase is First Retail <9983>, followed by Advantest <6857> in second place.

Economic indicators and remarks by important people

[Economic indicators]

NZ's current account balance for the 4-6 month period was -4.826 billion NZ dollars (estimate: -3.943 billion NZ dollars, 1-3 month period: -3.825 billion NZ dollars ← -4.359 billion NZ dollars).

Japan's trade balance for August was -695.3 billion yen (estimate: -1 trillion 432.4 billion yen, July: -628.7 billion yen).

Japan's machinery orders in July (excluding ships and electrical utilities) decreased by 0.1% compared to the previous month (estimate: +0.5%, June: +2.1%).

[Important Person's Remarks]

-Related sources.

"Some of the support countries for Ukraine are beginning to consider the possibility of ending the war through negotiations."

- September Government Monthly Economic Report

- 15:00 UK consumer price index for August (YoY forecast: +2.2%, July: +2.2%)

- 15:00 UK producer price index - output for August (YoY forecast: +0.5%, July: +0.8%)