In the afternoon trading on the 23rd, attention should be paid to the following three points.

- The Nikkei Average declined for the third consecutive day, with caution in buying due to post-election political uncertainties.

- The dollar-yen is firm, aiming for 152 yen.

- The top contributor to the decline is Fast Retailing <9983>, followed by Recruit Holdings <6098>.

■ The Nikkei Average declined for the third consecutive day, with caution in buying due to post-election political uncertainties.

The Nikkei average has declined for 3 consecutive days. It closed the morning session at 38,300.81 yen (volume estimated at 0.8 billion 90 million shares), down 111.15 yen (-0.29%) from the previous day.

The U.S. stock market on the 22nd was mixed. The Dow Jones Industrial Average closed down 6.71 points at 42,924.89, while the Nasdaq closed at 18,573.13, up 33.12 points. The market remained mixed as selling continued due to the retreat of expectations for aggressive interest rate cuts, leading to a slight decline after the opening. Positive economic indicators and an upward revision of the country's economic growth outlook by the International Monetary Fund (IMF) led to expectations of a soft landing, supporting buying and turning the market upwards. Towards the end, the Dow was pushed lower by selling due to aversion to rising interest rates, ending slightly lower, while the Nasdaq maintained a solid performance on expectations for high technology, keeping it in positive territory and closing mixed.

As U.S. stocks showed mixed movements, the Tokyo market started trading cautiously. The Nikkei average started at the previous day's closing level but lacked direction, hovering around 38,400 yen. Market attention is focused on the Tokyo Metro <9023>, which was listed on the main board today, and the trading value on the main board remained at 1.8 trillion yen. Tokyo Metro saw a predominance of buying interest, with trading value exceeding 200 billion yen in the morning session and market capitalization reaching the 1 trillion yen mark.

Among Nikkei average constituent stocks, some yen benefit related stocks such as Nichirei <2871>, Nitori Holdings <9843>, and Nissui <1332> declined, while TOTO <5332>, Disco <6146> remained weak. In addition, shipping stocks like Kawasaki Kisen <9107> and Nippon Yusen <9101>, which were bought yesterday, saw a decline. Furthermore, financial stocks like Daiwa Securities <8601>, Mizuho <8411>, Shizuoka Bank <5831>, and Sumitomo Mitsui <8316> were also sold off.

On the other hand, speculation buying led by Effissimo resulted in a sharp rise for Konica Minolta <4902>. Positive factors such as the progress in yen depreciation and good earnings from U.S. auto giant GM were considered, causing other auto stocks like Subaru <7270>, Toyota Motor <7203>, Honda <7267>, Mitsubishi Motors <7211>, Nissan <7201>, as well as auto parts companies like Denso <6902>, JTEKT <6473> to rise. Additionally, real estate stocks like Tokyo Tatemono <8804>, Mitsubishi Estate <8802>, and Tokyu Fudosan Holdings <3289> were also bought.

By sector, services, shipping, banks, securities & commodity futures trading, and retail declined, while transportation equipment, real estate, rubber products, food products, and mining rose.

The exchange rate is in the range of 151.60 yen to the dollar, with the dollar gaining strength against the yen. Active buying of Japanese stocks based on yen depreciation has quieted down, with political uncertainty after the Lower House elections weighing on the market sentiment. Although the election campaign is in its final stages, reports of struggles for the ruling Liberal Democratic Party and Komeito are a major concern, erasing the anomaly of 'buying during elections'. With the absence of active buyers, there is a possibility that the Nikkei average may gradually widen its downward range, so caution is advised for a further decline in the afternoon session.

The dollar-yen is firm, aiming for 152 yen.

In the morning of the 23rd, the dollar-yen strengthened in the Tokyo market, rising from 151.03 to 151.83 yen. With the increase in the US 10-year bond yield, there is a tendency to buy the dollar aiming for 152 yen. On the other hand, the euro-dollar temporarily fell below 1.08 dollars, but rebounded slightly due to buying interest.

The trading ranges so far are: dollar-yen 151.03 to 151.83 yen, euro-yen 163.07 to 164.04 yen, and euro-dollar 1.0792 to 1.0805 dollars.

Check stocks for the afternoon session

Seisui Holdings <1514> and THECOO <4255> saw their stocks hit the daily upper price limit.

*Includes temporary stopper (indicated price)

Top contributors to the decline were First Retailing <9983> in first place and Recruit Holdings <6098> in second place.

Economic indicators and remarks by important people

[Economic indicators]

US - October Philadelphia Fed Non-Manufacturing Business Activity: 6.0 (estimate: 4.1, September: -6.1)

US - October Richmond Fed Manufacturing Index: -14 (estimate: -17, September: -21)

[Important Person's Remarks]

• International Monetary Fund (IMF)

"World economic growth outlook 2024: 3.2% (previously 7.3%), 2025: 3.2% (3.3%)"

"There are downside risks to global economic growth, outlook for 2025 revised downward"

Not applicable.

• G20 Finance Ministers and Central Bank Governors Meeting (until the 24th)