Three points to focus on during the afternoon trading of the 7th.

Nikkei Average continues to rise, with buying dominance due to weak yen.

Dollar-yen struggles to decline, with price movements mainly driven by adjustments.

The top contributors to price increases were First Retail <9983> in first place and Advantest <6857> in second.

■ Nikkei Average continues to rise, with buying dominance due to weak yen

The Nikkei average continued to rise. It closed the morning session at 39,354.63 yen, up 719.01 yen (with an estimated trading volume of 0.9 billion 79.98 million shares).

The Dow Jones Industrial Average in the U.S. market at the end of last week closed at 42,352.75, up 341.16 points, while the NASDAQ closed at 18,137.85, up 219.38 points. The market opened with buying momentum due to the end of the East Coast port workers' strike and strong results in the September employment statistics, continuing to rise throughout the day on significant improvements in economic outlook. NVIDIA and other semiconductor stocks rose on increased demand expectations in AI (Artificial Intelligence), leading the NASDAQ higher. Market bullishness expanded towards the end of the session, with the Dow reaching a new all-time high.

Against the backdrop of a rising U.S. stock market, buying dominated the Tokyo stock market today. The Nikkei average also started rising, following the flow of Chicago futures. Geopolitical risks are still being monitored, but expectations of significant rate cuts at the next Federal Open Market Committee (FOMC) meeting have diminished following the results of the U.S. employment statistics. Amid rising U.S. long-term interest rates, the yen briefly hit the 149 yen level against the dollar in the foreign exchange market, tilting the market towards a bullish mood for the time being.

Individually, banking stocks like Mitsubishi UFJ Financial Group and Mizuho, as well as semiconductor-related stocks like Lasertec and Toshiba, performed well. Automobile-related stocks such as Toyota Motors and Honda, as well as Fujikura, Mercari, SoftBank Group, Sony Group, Fast Retailing, Mitsubishi Heavy Industries, Recruit Holdings, and Nintendo, all saw significant increases. Weathernews surged following increased profits and real dividend increases from the first quarter, while San-A and LITALICO were among the top gainers in the first half performance.

On the other hand, shipping stocks like Kawasaki Kisen Kaisha continued to weaken due to the dissipation of expectations for fare increases amid disruptions in marine shipping caused by the end of the U.S. port strike. Disco, which fell below the market consensus in sales for the July-September period, saw a sharp decline, along with companies like Yaskawa Electric, which revised its earnings forecast down to the market consensus level. Others such as Hikari Tsushin, Asahi, and Enigmo were among the top losers.

In terms of industries, banking, insurance, and securities and commodity futures trading industries saw an increase, while only the pulp and paper, air transportation, and marine transportation industries saw declines.

The afternoon session in the Tokyo market is likely to continue with a dominant buying trend, maintaining the Nikkei average in the high range. Following Mr. Ishiba's statement last week that there is no environment for additional rate hikes, speculations on early additional rate hikes have receded. The September U.S. employment statistics exceeded market expectations, leading to a rise in U.S. long-term interest rates. The exchange rate reached a momentary level of around 149 yen to the dollar, accelerating the decline in the yen. Positive sentiment is expected to continue towards local export-related companies. The Nikkei average is currently aiming to reclaim the high of 39,829.56 yen on September 27, with a recovery expected into the 40,000 yen range. With the dissolution of the House of Representatives on October 9 and the scheduled voting for the House of Representatives election on the 27th, anomalies such as the policy expectations of 'Elections are good for purchases' are leading the way, with the recovery of the 40,000 yen range being well within expectations. There is also a possibility of renewed interest in policy expectations centered on defense and regional revitalization.

The dollar-yen is showing reluctance to decline, with adjustments driving the price movement.

In the Tokyo market on the morning of the 7th, the dollar-yen showed reluctance to decline. Following strong US employment statistics at the end of last week, the dollar rose strongly to 149 yen, but at the beginning of the week in the Asian market, profit-taking selling pushed it down from 149.11 yen to 148.22 yen. However, due to the sharp rise in the Nikkei Average Stock Price, there was a shift towards selling the yen, making it difficult for the dollar to decline.

The trading ranges up to this point are as follows: the dollar-yen ranges from 148.22 yen to 149.11 yen, the euro-yen ranges from 162.70 yen to 163.57 yen, and the euro-dollar ranges from 1.0963 dollars to 1.0977 dollars.

Check stocks for the afternoon session

Sailor advertisement <2156>, Collaboration <3908>, and 4 stocks hit the daily limit.

*Includes temporary stopper (indicated price)

The top contributors to price increases were First Retail <9983> in first place and Advantest <6857> in second.

Economic indicators and remarks by important people

[Economic indicators]

USA September unemployment rate: 4.1% (Forecast: 4.2%, August: 4.2%)

USA September non-farm payrolls: +0.254 million people (Forecast: +0.15 million people, August: +0.159 million people)

USA September average hourly earnings: +4.0% year-on-year (Forecast: +3.8%, August: +3.9%)

[Important Person's Remarks]

・US President Biden: "I will support until Ukraine wins this war."

Israel has the right to retaliate against Iran's intense attacks. At the same time, Israel is urged to show restraint regarding attacks on Iranian petroleum facilities.

- 14:00 Economic Trend Index Advance Report for August (Financial estimates: 107.2, July: 109.3)

- 15:00 German Manufacturing Orders for August (MoM Forecast: -1.8%, July: +2.9%)