In the afternoon trading on the 17th, I want to focus on the following three points.

The Nikkei average rebounded for the first time in three days, with SOFTBANK GROUP CO leading, but it faces resistance at higher levels.

The dollar-yen pair fell back, as the rise in US interest rates eased.

The top contributor to the rise was SOFTBANK GROUP CO <9984>, followed by FAST RETAILING CO LTD <9983>.

The Nikkei average rebounded for the first time in three days, led by SOFTBANK GROUP CO, but it faces resistance at higher levels.

The Nikkei average rebounded for the first time in three days, closing the morning session at 39,520.06 yen, up 62.57 yen (+0.16%) from the previous day, with an estimated Volume of 0.9 billion 40 million shares.

The US stock market on the 16th showed mixed results. The Dow average fell by 110.58 dollars to 43,717.48 dollars, while the Nasdaq closed up by 247.17 points at 20,173.89. Following expectations of an additional interest rate cut at the upcoming Federal Open Market Committee (FOMC) meeting midweek, the market opened with slight gains. The December services PMI was at a nearly three-year high, suggesting an acceleration in growth, which was positively received and led to an increase in the gains, although the Dow average remained heavy with continued declines, ending slightly lower. In contrast, the Nasdaq, driven by gains in Apple, Google’s parent company Alphabet, and semiconductors Broadcom, showed solid performance, refreshing its all-time high.

With the Nasdaq reaching a new all-time high, the Tokyo market started with a bias towards buying, particularly in tech stocks. SOFTBANK GROUP CO’s CEO Masayoshi Son met with the soon-to-be president Trump, announcing a 15 trillion yen investment in the USA, which drove up SOFTBANK GROUP CO's stock. The Nikkei average rose to 39,796.22 yen at one point but did not maintain aggressive buying ahead of the Japan-US central bank meetings. The Nikkei average reduced its gains and ended the morning session.

Among the Nikkei-quoted stocks, defense-related stocks such as IHI, Japan Steel Works, and Mitsubishi Heavy Industries saw purchases, along with semiconductor stocks like Socionext and Renesas Electronics. Additionally, entertainment stocks like Bandai Namco HD, NINTENDO CO LTD, DeNA, Konami Group, and Sony Group Corp also rose. Furthermore, stocks like Sumitomo Realty & Development, Chugai Pharmaceutical, Keisei Electric Railway, and Nitori HD were purchased as well.

In contrast, shares of Advantest were mainly sold off due to the decline in NVIDIA, along with drops in Konica Minolta and Ricoh. Financial stocks such as Daiwa Securities Group, Tokio Marine, Nomura, and Concordia also underperformed. Other stocks that fell included JTEKT, NISSAN MOTOR CO, and Mitsui Mining.

By industry, Other Products, Information & Communications, Precision Instruments, Machinery, and Electric Appliances experienced gains, while Securities & Commodity Futures, Insurance, Petroleum & Coal Products, Nonferrous Metals, and Banks saw declines.

After the buying frenzy, Tokyo's market held back on aggressive buying with the FOMC on the 17th-18th and the Bank of Japan’s monetary policy decision meeting on the 18th-19th in focus. The exchange rate progressed toward a gradual yen depreciation and dollar appreciation, hovering around 154 yen per dollar. There is a growing view in the foreign exchange market that the Bank of Japan will not implement a rate hike in December, yet the stock market remains in a state of indecision. The Nikkei average is likely to fluctuate around the previous day's closing level due to strong wait-and-see sentiment.

The dollar-yen has fallen back as U.S. interest rates pause.

On the morning of the 17th in the Tokyo market, the dollar-yen rose to as high as 154.34 yen, but then fell back to 153.80 yen. Following a pause in the rise of the U.S. 10-year Treasury yield, the previously strong dollar in the overseas market saw a retreat in buying. Additionally, the Nikkei 225 index gradually narrowed its gains, weakening yen selling.

The trading range so far has been: dollar-yen from 153.80 yen to 154.34 yen, euro-yen from 161.91 yen to 162.43 yen, and euro-dollar from 1.0509 dollars to 1.0533 dollars.

■ Stocks to check in the latter half.

7 stocks, including LIBERAAWARE ＜218A＞ and LIBERTA ＜4935＞, reached their upper limits.

This includes the temporary limit high (response value).

The top contributor to the rise is SOFTBANK GROUP CO ＜9984＞, followed by FAST RETAILING CO LTD ＜9983＞.

Economic indicators and remarks by important people

[Economic indicators]

USA's December NY Federal Reserve Manufacturing Business Index: 0.2 (Forecast: 10.0, November: 31.2).

USA's December Manufacturing PMI preliminary value: 48.3 (Forecast: 49.5, November: 49.7).

USA's December Services PMI preliminary value: 58.5 (Forecast: 55.8, November: 56.1).

・USA December Composite PMI preliminary value: 56.6 (Forecast: 55.1, November: 54.9)

Key Person Statements

・Trump, the next President of the USA

"Certain progress in stopping the war in Ukraine"

"Might meet with the Prime Minister of Japan before the inauguration ceremony"

< Domestic >

None

・16:00 UK ILO unemployment rate for August to October (Financial Estimates: 4.3%, July to September: 4.3%)

・Federal Open Market Committee (FOMC, until the 18th)