The Nikkei average rebounded significantly, ending the morning session at 38,504.11 yen (with an approximate volume of 700 million shares), up 401.67 yen (+1.05%) from the previous day.
The US stock market rose on the 17th. The Dow rose 188.94 points (+0.49%) to 38,778.10, the Nasdaq rose 168.14 points (+0.95%) to 17,857.02, and the S&P 500 rose 41.63 points (+0.77%) to 5,473.23. The market opened with caution due to movements that were worried about the turmoil in French politics and the Federal Reserve Board's cautious attitude towards interest rate cuts. Afterward, it turned into buying with high hopes of a soft landing, and the market remained strong throughout the day. In the last part of trading, the upward trend expanded, and the Nasdaq renewed its record high for the consecutive day.
The Tokyo market opened with a buying trend due to a calm in the situation in Europe, a rising US market, and a backlash against yesterday's sharp decline. The Nikkei average rebounded to around 38,500 yen due to the buyback of futures, but trading volume on the prime market was low at 1.6 trillion yen. Like yesterday, active trading was held in check even if the Nikkei average fluctuated by about 1%.
In the selected stocks of the Nikkei average, a corner of Apple-related stocks, such as TDK (6762), Murata Manufacturing (6981), and MinebeaMitsumi (6479), as well as semiconductor stocks, such as Screen HD (7735) and Tokyo Electron Ltd. (8035), were firm. In addition, DOWA Holdings (5714), Nissan Chemical (4021), and Resonant Holdings (4004) were purchased. On the other hand, the pharmaceutical sector, including Takeda Pharmaceutical (4502), Kyowa Kirin (4151), Eisai (4523), and Daiichi Sankyo (4568), as well as Seven & I Holdings (3382) and Ajinomoto (2802), were weak. In addition, real estate stocks, such as Mitsubishi Estate (8802) and Mitsui Fudosan (8801), were lackluster.
In terms of industry classification, other products, services, textiles and apparels, insurance, and precision instruments rose, while only 4 sectors, pharmaceuticals, electric and gas utilities, wholesale trade, and real estate, fell.
Although there were concerns about the situation in Europe, Le Pen, the leader of the extreme right-wing party expected to win the French general election, revealed his intention to cooperate with President Macron to ease the market turmoil. Nevertheless, the cautious mood will likely persist until the lower house elections are held from the end of June to early July (the first round of voting is on June 30, and the final round is on July 7). As a result, there is a strong possibility that trading on the Tokyo market will further decrease. Although it is necessary to consider the supply and demand situation, such as outstanding credit purchases, it can be described as a summer drought market before the start of the rainy season. I assume that the market will remain in a stalemate at around 38,500 yen in the afternoon session.