In the second half of the 2nd day's trading, the following three points should be noted.
Nikkei continued to rise for three consecutive days, with financial stocks rising and TOPIX updating its year-to-date high.
The USD/JPY rate was slightly up and the upward trend was maintained.
The top gainers were First Retailing Co., Ltd. (9983) and Daiichi Sankyo Co., Ltd. (4568), respectively.
Nikkei continued to rise for three consecutive days, with financial stocks rising and TOPIX updating its year-to-date high.
The Nikkei average has risen for three consecutive days. It ended the morning session at 39,780.58 yen (approximately 880 million shares) with an increase of 149.52 yen (+0.38%) from the previous day.
The U.S. stock market rebounded on the 1st. The Dow Jones Industrial Average ended trading at 39,169.52 (+50.66 or +0.13%), while the NASDAQ rose 146.70 points (+0.83%), closing at 17,879.30. The S&P 500 rose 14.61 points (+0.27%), closing at 5,475.09. The European stock market responded favorably to the French election results and rose at the opening. However, it turned downward due to concerns of growth slowdown after the June ISM Manufacturing PMI fell slightly below market expectations and contracted for the third consecutive month. The rise in long-term interest rates weighed on the market, and the Dow Jones Industrial Average hovered around the previous day's closing level. The NASDAQ was supported by Microsoft and other AI stocks.
The Tokyo market opened with a strong buy, fueled by the rise in U.S. stocks. Financial stocks with large market capitalizations, such as insurers and banks, continued to rise, and the TOPIX remained strong, updating its year-to-date high for several consecutive days. The Nikkei average expanded its gains to 39,929.67 yen, and the trading volume in the Prime market in the morning session exceeded 2 trillion yen for the first time in a while as trading increased slightly.
In the Nikkei average stocks, Kawasaki Kisen Kaisha, Ltd. <9107> stood out for its rise as the rise in container shipping market conditions were viewed as material. Financial stocks, such as T&D Holdings <8795>, MS&AD <8725>, Dai-ichi Life Holdings <8750>, Tokio Marine Holdings <8766>, Daiwa Securities Group <8601>, Nomura Holdings <8604>, Mitsubishi UFJ Financial Group <8306>, and Mizuho Financial Group <8411>, rose in general, as the yield of a new 10-year government bond, which is an indicator of long-term interest rates, remained at around 1.08%. In addition, MinebeaMitsumi <6479> and Mitsubishi Heavy Industries <7011> were bought.
On the other hand, semiconductor stocks such as Socionext <6526>, Laser Tech <6920>, and Renesas Electronics <6723> were unimpressive due to the leveling off of Nvidia's stock price. Sapporo Holdings <2501>, Takashimaya <8233>, Eisai <4523>, Nitori Holdings <9843>, and DIC <4631> fell.
In terms of industry, mining, insurance, securities and commodity futures trading, marine transportation, and petroleum and coal products rose, while pulp and paper, warehouse and transportation-related industries, land transportation, rubber products, and iron and steel fell.
In the afternoon Tokyo market, the TOPIX dominant trend is expected to continue with an eye on the currency and interest rate markets. The exchange rate is hovering around 161 yen 50 sen per dollar, and there has been no significant movement such as noticeable yen buying after the rate rose to the 161 yen 70 sen level during overseas hours last night. Due to the speculation that former President Trump's chances of winning have increased after last weekend's TV debate, it is expected that he will execute fiscal expansion for economic growth, and the U.S. interest rate has risen. Japanese 10-year government bond yields have also risen to 1.08%, but the Japanese-U.S. interest rate differential on 10-year bonds has slightly expanded to 3.4%, strengthening the trend for a weak yen and a strong dollar. There is also a strong view that it is difficult for the government and the Bank of Japan to intervene by buying yen due to the gradual weakening of the yen.
Typically, a weaker yen would provide a tailwind for export-related stocks. However, the results of the revised GDP for the January-March period, which showed a 2.9% annualized decline, significantly lower than the revised value (-1.8% decline), may have increased the negative view of the Japanese economy, such as that Japan's monetary normalization has become more distant and it will take more time to get out of deflation. While the upward trend of Japanese stocks, centered around financial stocks, continues, it is important to keep in mind that negative mood surrounding the Japanese economy may restrain buying sentiment.
The USD/JPY rate was slightly up and the upward trend was maintained.
In the morning of the 2nd day in the Tokyo market, the USD/JPY rate increased from 160.74 yen to 161.18 yen. There were also scenes where the yen was bought due to the yen weakness policy by the Japanese government. Later, the selling of dollars retreated due to the sluggish decline in the yield of the US 10-year bonds, and the euro/dollar was slightly soft.
The trading range up until now is 160.74 yen to 161.18 yen for dollar-yen, 172.61 yen to 173.21 yen for euro-yen, and 1.0732 dollars to 1.0761 dollars for euro-dollar.
Check stocks for the afternoon session
Four stocks, including Ribomic Inc (4591) and Ligua Co., Ltd. (7090), hit the upper limit.
*Includes temporary stopper (indicated price)
The top gainers were First Retailing Co., Ltd. (9983) and Daiichi Sankyo Co., Ltd. (4568), respectively.
Economic indicators and remarks by important people
[Economic indicators]
Japan's monetary base in June was up 0.6% year on year (May: +0.9%).
[Important Person's Remarks]
-Minister of Finance Suzuki
"I won't comment on each exchange rate movement."
"Foreign exchange rates are decided in the market by various factors."
"I will carefully watch the movement of the foreign exchange market."
Minutes of the Reserve Bank of Australia: "There is still information indicating the need to be vigilant about the risk of upward inflation."
Not applicable.
Not applicable.