In the afternoon of the 27th trading day, the following three points should be noted.

The Nikkei Average has risen for three consecutive days, recovering to the 40,000 yen range for the first time in two weeks due to observations of Futures Buying, etc.

The dollar-yen exchange rate is weak, with profit-taking Sell.

The top contributor to the price increase is Fast Retailing Co., Ltd. <9983>, and the second is Advantest Corporation <6857>.

The Nikkei Average has risen for three consecutive days, recovering to the 40,000 yen range for the first time in two weeks due to observations of Futures Buying, etc.

The Nikkei Average has risen for three consecutive days. It ended the morning session at 40,074.56 yen, up 506.50 yen (+1.28%) from the previous day, with an estimated Volume of 0.9 billion 30 million shares.

On the 26th, the US stock market was mixed. The Dow Inc rose by 28.77 dollars to 43,325.80 dollars, while the Nasdaq closed down by 10.77 points to 20,020.36. An unexpected decrease in unemployment insurance claims led to selling due to concerns over rising long-term interest rates, causing a decline after the market opened. Amid a lack of momentum after the Christmas holiday, resilient buying expectations for a Christmas rally towards year-end supported the lower levels. Later, as the number of continuing unemployment insurance recipients reached a three-year high and the results of the seven-year bond auction were strong, interest rates began to decrease, leading to a resurgence in buying towards the end, allowing the Dow to barely recover to positive territory. The Nasdaq could not maintain buying and ended mixed.

Although US stocks were mixed, the Tokyo market began trading slightly favoring Buy as the exchange rate shifted to a weaker yen and stronger dollar compared to the previous day. The Nikkei Average started at around 39,600 yen and gradually expanded its increase, recovering to the 40,000 yen range during trading hours for the first time since December 12.

In the Nikkei Average adopted stocks, Nidec Corporation Sponsored ADR, which made an unsolicited TOB on Makino Milling Machine, rose, and Makino Milling Machine reached the limit up buying interest. This news served as a catalyst, leading to gains in other machine tool stocks like Okuma. Additionally, semiconductor-related stocks such as Socionext, Renesas Electronics, Screen HD, and Advantest were also bought. Furthermore, automobile stocks including Toyota, Honda, Hino Motors, and Suzuki continued to see buying interest.

On the other hand, Nissan Motor fell following reports that the consolidation ratio with Honda would be 5 to 1, and Mitsubishi Motors was also sold off. Additionally, Takashimaya and J. Front Retailing, which were bought yesterday, experienced preemptive profit-taking selling among department store stocks. Other stocks such as Yamaha Motor, Furukawa Electric, Konica Minolta, JT, and Canon Inc-Spons Adr also declined.

By sector, airlines, transportation equipment, electricity and gas, services, and iron & steel saw gains, while only the mining and rubber products sectors declined.

Today, many market participants expected the Nikkei average to trend sideways due to factors such as the December ex-rights (about 50 yen), but it unexpectedly rebounded above the 40,000 yen mark with surprising strength. Although there is a lack of significant Buy observations, it is seen as futures-led as notable stocks such as Recruit HD <6098> and Fast Retailing <9983>, which have a substantial impact on the 225 index, are being bought. There is also a possibility that foreign investors, who have been quiet recently, are entering the market with purchases. The Nikkei average, resembling a 'tail-end swing', may rise further in the afternoon session.

■ The dollar-yen is soft, profit-taking selling.

In the Tokyo market on the morning of the 27th, the dollar-yen became weak, dropping from 157.94 to 157.50. Despite a firm Nikkei Average, conditions were prone to yen-selling, but the dollar failed to break above 158 yen. Selling pressure increased due to the heaviness at upper levels, leading to subsequent descent.

The trading range up to this point is as follows: dollar-yen is between 157.50 and 157.94, euro-yen is between 164.03 and 164.66, and euro-dollar is between 1.0408 and 1.0424.

■ Stocks to check in the latter half.

・RIZAP Group <2928>, Alpico Holdings <297A>, and others, 6 stocks hit the daily limit high.

This includes the temporary limit high (response value).

・The top contributor to the price increase is Fast Retailing <9983>, and second is Advantest <6857>.

Economic indicators and remarks by important people

[Economic indicators]

・Japan, December Tokyo area Consumer Price Index (excluding fresh foods): +2.4% (year-on-year estimate: +2.5%, November: +2.2%).

・Japan, November unemployment rate: 2.5% (estimate: 2.5%, October: 2.5%).

・Japan, November effective job openings-to-applicants ratio: 1.25 times (estimate: 1.25 times, October: 1.25 times).

Japan: November industrial production preliminary value: -2.3% month-on-month (forecast: -3.5%, October: +2.8%).

Key Person Statements

Main opinions from the Bank of Japan monetary policy decision meeting (December 18-19).

"The upside risk in prices is not an urgent reason for interest rate hikes."

"Factors for determining interest rate hikes: wages, service prices, personal consumption, USA economy and policy operation, market trends."

"Expected inflation rate is stable, and there is no situation where prices are accelerating sharply."

"Expectations for solid wage increases are consistent with a 2% price rise in next year's spring labor negotiations."

"To verify the progress of economic improvement through data, maintaining the current policy is appropriate for the time being."

< Domestic >

・ Nothing special

・ Nothing special