The Nikkei Average rebounded slightly. It ended the morning session at 38,689.22 yen (approx. 620 million shares traded) on the previous day, up 92.75 yen (+0.24%) from the previous day's closing.
The U.S. stock market on the 21st was mixed. The Dow Jones Industrial Average closed at 39,150.33, up 15.57 points (+0.04%), while the Nasdaq Composite Index closed at 17,689.36, down 32.23 points (-0.18%), and the S&P500 closed at 5,464.62, down 8.55 points (-0.16%). There was mixed trading at the opening. A selling spree of holdings due to the expiration of U.S. stock-related options concentrated on 'triple-witching' supported buying of lagging stocks, among others. The Nasdaq continued to be weighed down by the selling of semiconductor stocks such as Nvidia and Micron Technology from the previous day.
As U.S. high-tech stocks were cheap at the end of last week, the Tokyo market opened slightly biased towards selling. The Nikkei Average eased slightly at the start and then bottomed out, with a sluggish decline followed by a rebound. It was a stalemate slightly above the previous day's closing level, but the steady trend continued. As it was the beginning of the week, business was quiet and trading volume in the prime market for the morning session was limited to 1.5 trillion yen.
In Nikkei Average constituent stocks, Nippon Ham <2282> and Otsuka Holdings <4578> were bought on the back of investment recommendations from securities firms, with Toyota Motor <7203>, Honda Motor <7267>, and other auto stocks firm against a backdrop of a weak yen against the dollar. In addition, pharmaceutical stocks such as Chugai Pharmaceutical <4519>, Astellas Pharma <4503>, and Takeda Pharmaceutical <4502> were also bought.
On the other hand, Mercari <4385> fell due to concerns about increased competition as part-time job intermediary app Timey goes public in the growth market. Resources-related stocks such as Sumitomo Metal Mining <5713> and Idemitsu Kosan <5019> were sold, and Mitsukoshi Isetan <3099>, Yaskawa Electric <6506>, Taisei <1801>, Bridgestone <5108>, and others were lukewarm.
In terms of industry, transportation equipment, pharmaceuticals, warehouses and transportation-related businesses, precision instruments, and land transportation increased, while rubber products, non-ferrous metals, electric and gas utilities, mining, and services declined.
The exchange rate is edging closer to the 160 yen level, although the dollar and yen are no longer appreciating or falling due to a drop in U.S. 10-year bond yields. There are voices saying that concerns about interventions by the government and the Bank of Japan to buy yen are increasing as Japan has been listed on the U.S. Treasury Department's list of countries that manipulate exchange rates. This morning, Mr. Kanda, the financial affairs director, said that the government is prepared to intervene whenever necessary and made a verbal intervention. While the dollar's appreciation against the yen has temporarily stalled, there is a possibility that foreign investors will sell off the yen in the afternoon. As of the morning session, it is providing a tailwind for export-related stocks, but if the dollar reaches the 160 yen level, selling triggered by intervention could cause volatility in both exchange rates and stock prices. Although the afternoon Tokyo market is expected to be calm, the exchange rate trend should be monitored.