The Nikkei average rebounded for the first time in three days. It ended the morning trading at 38,841.75 yen (approximate volume of 870 million shares) with an increase of 351.58 yen from the previous day.
On the 5th, the U.S. stock market continued to rise. The Dow Jones Industrial Average closed at 38,807.33 (+0.25%), the Nasdaq rose 330.86 points (+1.96%) to 17,187.91, and the S&P500 rose 62.69 points (+1.18%) to 5354.03. Anticipating an early rate cut due to job growth estimates falling below expectations in the ADP employment report for the private sector, buying prevailed after the opening. Then, after the release of the ISM non-manufacturing business activity index, which showed better-than-expected growth, the Dow turned downward in line with the rise in long-term interest rates, but strong year-end rate cut expectations reversed the trend to an upward one. The Nasdaq continued to rise as Nvidia, a semiconductor company, raised the index for days and closed at a record high.
Following the rise of the Nasdaq, the Tokyo market started trading with a strong focus on high-tech stocks. The Nikkei average expanded its gains and recovered to the 39,000 yen level. After a round of buying, it remained above the 25-day moving average of 38,592 yen due to buying of marine transportation stocks and semiconductor stocks with relatively low prices.
Among the Nikkei 225 constituents, SoftBank Group Co. Ltd. was bought due to reports of mass shareholding and stock purchase requests by Elliott Management, a shareholder who demands money. Also, stocks of semiconductor companies such as Tokyo Electron Corp., Advantest Corp., Disco Corp. and Renesas Electronics Corp. rose with the rise in Nvidia stock price. In addition, Credicorp Ltd., Kawasaki Kisen Kaisha Ltd., Fujikura Ltd. and Daiichi Sankyo Co. Ltd. were bought.
On the other hand, Laser Tech Ltd. was under strong selling pressure as the negative report by Scorpion Group, a short-selling specialized fund, continued to be seen negatively, in addition to the decline in Alps Alpine Co. Ltd. Stock prices of Omron Corp., Kyocera Corp., Eisai Co. Ltd. and Nitori Holdings Co. Ltd. also declined.
In terms of industries, marine transportation, securities and commodity futures trading, petroleum and coal products, nonferrous metals, and electricity and gas companies rose, while real estate, services, textiles & apparels, marine products, agriculture, forestry and fisheries, and food products fell.
In the bond market, the yield of the newly issued 10-year government bond, which is a benchmark for long-term interest rates, fell by 0.015% from the previous day and is now at 0.985%. At the Bank of Japan's Monetary Policy Meeting in March, Commissioner Nakamura, who opposed the removal of negative interest rates, claimed that "maintaining the current policy for the time being is appropriate" at a financial and economic forum held in Sapporo in the morning. It is said that he was perceived as a dove in the market, as he also suggested that it was "an unprecedented opportunity" to achieve the price target. Due to the declining US interest rates, the interest rate gap between Japan and the US based on 10-year government bonds is slightly narrowing to 3.2%. Although the exchange rate has stabilized at around 155.50 yen to the dollar, there is a possibility that the yen may appreciate and the dollar may weaken due to the unwinding of yen-selling positions.
The afternoon Nikkei average is expected to remain at the same level as the morning closing level, taking into account the foreign currency and bond markets.