In the afternoon of the 28th session, the following three points should be noted.

Nikkei Average sharply rebounds, heading for buybacks with the election results already priced in.

Dollar-yen is firm, driven by the general election currency.

Top contributors to the price increase are Advantest <6857>, with Central Glass <4519> in second place.

Nikkei Average sharply rebounds, heading for buybacks with the election results already priced in.

The Nikkei average made a significant rebound. It closed the morning session at 38,463.50 yen, up 549.58 yen (+0.9 billion, 44.32 million shares in trading volume).

Last weekend, the Dow Jones Industrial Average closed at 42,114.40 points, down 259.96 points, while the Nasdaq closed at 18,518.61 points, up 103.12 points. The Michigan Consumer Sentiment Index exceeded expectations, leading to buying based on expectations of a soft landing. After opening, the Dow fell due to the decline of McDonald's (MCD) and concerns over rising long-term interest rates. However, the Nasdaq remained strong throughout the day, driven by expectations for major tech companies' earnings.

While observing the mixed performance of the U.S. stock market at the close, the Nikkei Average started with selling pressure due to the ruling party falling below the majority in the weekend House of Representatives election. However, there may have been anticipation of the ruling party falling below the majority in the lower house election, and the selling pressure in the morning subsided, leading to a significant increase later. There is also a growing view that the Bank of Japan will find it difficult to move towards an early additional rate hike due to domestic political uncertainties, which may have contributed to the strengthening of the U.S. dollar and weakening of the yen.

Among individual stocks, shipping stocks like Kawasaki Kisen Kaisha <9107> and Nippon Yusen <9101>, semiconductor-related stocks such as Laser Tech <6920> and Toei Electric <8035> performed well. Toyota Motor <7203>, Fast Retailing <9983>, SoftBank Group <9984>, Keyence <6861>, Recruit Holdings <6098>, Nintendo <7974>, among others, rose. Furthermore, Chugai Pharmaceutical <4519>, which received better-than-expected upward revisions in earnings, and Premier Group <7199>, with a significantly expanding profit rate in the first half, surged. Loze <6323>, MacbeeP <7095>, and Freebit <3843>, among others, were among the top gainers in terms of price increase.

On the other hand, Mitsubishi Heavy Industries <7011>, IHI <7013>, Kawasaki Heavy Industries <7012>, among others, showed a weak performance. Shin-Etsu Chemical <4063>, Fujikura <5803>, also declined. Tokyo Steel <5423>, which saw a significantly unexpected downward revision, and Olympus <7733>, where news of CEO Kaufman's resignation spread, experienced sharp declines. Nomi Bosai <6744>, Japan Steel Works <5631>, Aichi Corporation <6345>, among others, were among the top decliners in terms of price decrease.

By industry sector, transportation equipment, pharmaceuticals, and marine transportation rose, while mining, petroleum and coal products, and chemicals declined.

It is likely that the afternoon Nikkei average stock price will continue to face strong resistance. While the election results may have been partially factored in by last weekend, the question remains whether there will be enough new buying factors for a further increase. First, the Bank of Japan will hold a monetary policy meeting from the 30th to the 31st. It is unlikely that there will be speculation about raising the policy interest rate in this meeting, but attention will be focused on whether a positive stance towards additional rate hikes will be confirmed in the "Economic and Price Outlook Report" released simultaneously and at the press conference of Governor Ueda after the meeting. Furthermore, with the U.S. presidential election on November 5th and the extension of trading hours in the Tokyo market, caution is advised due to immediate uncertainties. As the earnings reports for the July-September quarter pick up pace, the focus may shift towards individual stock selection-led initiatives.

The dollar-yen is on a strong footing, supported by the general election currency.

In the morning of the 28th in the Tokyo market, the dollar-yen is on a strong footing, rising from 152.66 yen to 153.87 yen. 2

In the election on the 27th, the Liberal Democratic and Komeito parties fell below the majority, but to some extent it was already priced in.

As the political uncertainty was dispelled, the risk-averse attitude retreated. Investors turned to buying stocks and selling the yen.

The trading range so far, the dollar-yen is from 152.66 to 153.87, and the euro-yen is 164.73

Yen to 166.07 Yen, Euro to Dollar is from 1.0788 dollars to 1.0801 dollars.

Check stocks for the afternoon session

・Base Food <2936>, RSC <4664>, 2 stocks have reached the daily limit.

*Includes temporary stopper (indicated price)

・The top contributors to the price increase are Advantest <6857>, with Nakaoku Seiyaku <4519> in second place.

Economic indicators and remarks by important people

[Economic indicators]

US September durable goods preliminary report: -0.8% month-on-month (forecast: -1.0%, August: -0.8%←0.0%)

US September durable goods orders (excluding transportation equipment) preliminary report: +0.4% month-on-month (forecast: -0.1%, August: +0.6%←+0.5%)

US September manufacturing shipments and capital goods (excluding aircraft and non-defense) preliminary report: -0.3% month-on-month (forecast: 0.0%, August: -0.1%)

US October University of Michigan Consumer Sentiment Index final value: 70.5 (forecast: 69.0, preliminary value: 68.9)

[Important Person's Remarks]

Lagarde, President of the European Central Bank (ECB)

"Disinflation is on a progressing trajectory"

"Data suggests economic slowdown in the second half"

Not applicable.

Not applicable.