In the afternoon trading of the 21st, we want to pay attention to the following three points.
・The Nikkei Average fell for the first time in 4 days, high-tech stocks sold but financial stocks held up ・The dollar-yen is struggling and is restrained by Japan's weak yen ・The top two losers were SoftBank G <9984> and Advantest <6857>
・The Nikkei Average fell for the first time in 4 days, high-tech stocks sold but financial stocks were supported.
SoftBank Group (9984) was the biggest contributor to the decline, followed by Advantest (6857).
■The Nikkei Average fell for the first time in 4 days, high-tech stocks sold but financial stocks were supported
The Nikkei Average fell for the first time in 4 days. At 38,626.95 yen (approx. 690 million shares traded), it ended morning trading down 6.07 yen (-0.02%) from the previous day.
The US stock market on the 20th was mixed. The Dow Jones Industrial Average closed at 39,134.76 (+0.77%), the NASDAQ closed at 17,721.59 (-0.79%), and the S&P 500 closed at 5473.17 (-0.25%). At the start, new unemployment insurance claims caused a rise in interest rates to be disfavored, while housing starts and the Philadelphia Federal Reserve manufacturing sentiment index showed an economic slowdown, and expectations of a rate cut by the Federal Reserve Board (FRB) provided support. The NASDAQ reached a record high in the morning, but became sluggish in the afternoon. ENVIDIA, which had been rising for the past few days, was sold, as triple witching day, which is the day when stock index futures, stock index options, and individual stock options expire, falls on the 21st.
In response to the decline in US high-tech stocks, the Tokyo market opened slightly in favor of selling. After the market started, the Nikkei Average bounced back temporarily, but there was no active buying amid a lack of clues. The TOPIX, in which financial stocks rose due to the rise in interest rates, remained solid, but the Nikkei Average remained at the previous day's closing level. The transaction value on the prime market in the morning remained at 1.7 trillion yen.
TDK <6762>, Advantest <6857>, Shin-Etsu Chemical <4063>, Nichiden <6988>, and MinebeaMitsumi <6479>, which had been bought at the moment, fell due to the decline in NASDAQ, as well as Laser Tech <6920>. In addition, some pharmaceutical stocks, such as Shionogi & Co., Ltd. <4507> and Daiichi Sankyo Co., Ltd. <4568>, were sold.
On the other hand, IHI <7013> was in a buying phase, and shipping stocks such as Kawasaki Kisen <9107>, Mitsui O.S.K. Lines <9104>, and Nippon Yusen <9101> were firm, due to the material view of the biomass combustion test review with the Thai Power Generating Corporation. Also, Sumitomo Dainippon Pharma <4506>, Otsuka Holdings Co., Ltd. <4578>, and Shiseido Co., Ltd. <4911> were bought.
In terms of industry, electric machinery, other finance, metal products, electricity and gas, real estate, etc. fell, while marine transportation, insurance, land transportation, mining, petroleum and coal products rose.
The exchange rate is progressing with a weaker yen and strong dollar due to 1 dollar being worth over 159 yen. On the 20th, the US Department of the Treasury released its foreign exchange policy report every six months and added Japan to the "watchlist" to monitor whether it is manipulating the exchange rate. This is the first watchlist addition in a year. The fact that the total amount of current account surplus exceeded the formal standard for the target period of 2023 due to the current drop in crude oil prices means there was no wording condemning Japan's intervention in exchange for April and May 2024. However, it could be viewed that intervention by the government and the Bank of Japan would become slightly more difficult after being added to the watchlist. Comments from Finance Ministry official Kanda have also been reported, but there is a possibility that speculative selling of a weaker yen and stronger dollar may proceed. The afternoon Tokyo market is expected to be quiet just like the morning market, but attention should be paid to exchange rate trends.
■The dollar-yen is struggling and restrained by Japan's weak yen
On the morning of the 21st in Tokyo market, the USD/JPY struggled to gain ground. Initially rising from 158.82 yen to 159.12 yen due to dollar buying caused by the increase in US 10-year bond yields. However, due to Japan's repeated warnings against a weak yen and the caution surrounding exchange rate interventions, yen selling retreated, pushing down the major currencies.
The trading range so far is as follows: USD/JPY 158.82 yen to 159.12 yen, EUR/JPY 170.03 yen to 170.36 yen, EUR/USD 1.0701 dollars to 1.0717 dollars.
Check stocks for the afternoon session
Two stocks, Manabi Aid (184A) and Trace On Products (6696), hit the daily limit up.
*Includes temporary stopper (indicated price)
SoftBank Group (9984) was the biggest contributor to the decline, followed by Advantest (6857).
Economic indicators and remarks by important people
[Economic indicators]
National Consumer Price Index (excluding fresh food) in May 2022: +2.5% year-on-year (forecast: +2.6%, April: +2.2%).
[Important Person's Remarks]
-Minister of Finance Suzuki
"Excessive exchange rate fluctuations have a negative impact on the economy."
"We will communicate closely with other countries."
- Chief Cabinet Secretary Lin
"The designation of Japan's policies as a subject of the US Foreign Exchange Report does not indicate that they are viewed as problematic."
"Maintaining a high level of trust in the yen is important."
"We will keep a close eye on the situation and respond appropriately."
Kanda, Vice Minister of Finance
"Our policy for responding appropriately will not change if there are excessive fluctuations."
"There was an effect from exchange rate interventions."
"The current exchange rate is not just due to one factor."
Not applicable.
15:00 UK May retail sales (including automotive fuel) (MoM forecast: +1.8%, April: -2.3%)
16:30 Germany June manufacturing PMI flash estimate (forecast: 46.4, May: 45.4)
16:30 Germany June services PMI flash estimate (forecast: 54.4, May: 54.2)
- Eurozone finance ministers meeting