In the afternoon trading on the 12th, there are three points to focus on:

The Nikkei average fell sharply and the decline widened to over 1000 yen at one point, due to the sudden drop in high-tech stocks.

The dollar-yen pair is rebounding, with the dollar being bought back despite intervention alert.

- The top contributors to the decline are Tokyo Electron (8035) and First Retailing (9983).

The Nikkei average fell sharply and the decline widened to over 1000 yen at one point, due to the sudden drop in high-tech stocks.

The Nikkei average fell significantly. It ended morning trade at 41,388.92 yen (approx. 0.9 billion 90 million shares traded) down 835.10 yen (-1.98%) from the previous day.

The U.S. stock market was mixed. The Dow Jones Industrial Average rose 32.39 points (+0.08%) to 39,753.75, the Nasdaq fell 364.04 points (-1.95%) to 18,283.41, and the S&P 500 fell 49.37 points (-0.88%) to 5,584.54 at the close. The June Consumer Price Index (CPI) provided evidence of inflation slowing and increased expectations of a rate cut. The Dow rose steadily on the recovery of interest rate-sensitive real estate and other sectors, but the Nasdaq fell throughout the day due to rotation and a sense of exhaustion of materials near its all-time high, leading to profit-taking sales and expanding losses toward the end of the day. The market ended mixed.

Against the backdrop of the sharp drop in the Nasdaq and the acceleration of the yen's appreciation, the Tokyo market started trading with a selling bias. The decline in the Nikkei average temporarily exceeded 1,000 yen at one point due to the sharp drop in semiconductor stocks and selling of 225 futures contracts. On the other hand, over 60% of stocks in the Prime Market rose and TOPIX was relatively firm. The weakness of the Nikkei average, which had been rising aggressively, was noticeable. The special final settlement price of July options (SQ provisional value) calculated at the opening was 41,531.26 yen.

For the Nikkei constituent stocks, semiconductor stocks such as Disco <6146>, Tokyo Electron <8035>, Advantest <6857>, Renesas Electronics <6723>, and Softbank Group <9984> fell sharply due to the NASDAQ's significant decline, and First Retail <9983> and Seven & iHD <3382> also experienced sharp declines as they announced their earnings. Additionally, due to the decrease in interest rates, T&D Holdings <8795>, Tokio Marine <8766>, and Dai-ichi Life Holdings <8750> also fell.

On the other hand, real estate stocks such as Sumitomo Realty <8830>, Mitsui Fudosan <8801>, Mitsubishi Estate <8802>, Tokyu Fudosan Holdings <3289>, and Tokyo Tatemono <8804> rose due to the prospect of lower interest rates, and Sekisui House <1928> and Daiwa House <1925> were also bought. In addition, Nitori Holdings <9843>, Nichirei <2871>, and Nissui <1332>, which are yen-positive stocks, rose.

In terms of industry, insurance, electric appliances, banking, marine transportation, and petroleum and coal products declined, while real estate, construction, textiles & apparels, aquaculture and agriculture, and land transportation rose.

The exchange rate has returned to the range of 159.30 yen to the dollar. There are speculations that the Japanese government and the Bank of Japan conducted a yen-buying intervention at the time of the June U.S. CPI announcement, but the yen is gradually coming under selling pressure. There is a view that the intervention effect is temporary, and it is expected that there will be active buying of the dollar. In the afternoon, the Nikkei average is likely to see a rebound centered on semiconductor stocks, which have been drastically falling. The relative strength of TOPIX also confirms the resilience of Japanese stocks.

The dollar-yen pair is rebounding, with the dollar being bought back despite intervention alert.

In the Tokyo market on the morning of the 12th, the dollar-yen pair reversed course, recovering to the 159 yen level after being pushed down to the 157 yen level, in spite of Japan's foreign exchange intervention being warned after the sharp rise of the yen in the overseas market the day before. However, the dollar seems to be easily bought back strongly in the low price range, due to the expectation of a rally.

The trading range so far is 157.77-159.45 yen for the dollar-yen pair, 171.53-173.28 yen for the euro-yen pair, and 1.0863-1.0874 dollars for the euro-dollar pair.

Check stocks for the afternoon session

Two stocks, Prime Strategy <5250> and Bakerent Consulting <6532>, hit the daily limit.

*Includes temporary stopper (indicated price)

- The top contributors to the decline are Tokyo Electron (8035) and First Retailing (9983).

Economic indicators and remarks by important people

[Economic indicators]

US new jobless claims for last week: 2.22 million (forecast: 2.35 million, previous: 2.38 million).

US continuing jobless claims: 1.852 million people (forecast: 1.86 million, previous: 1.856 million ).

US consumer price index for June: YoY +3.0% (forecast: +3.1%, May: +3.3%).

[Important Person's Remarks]

-Minister of Finance Suzuki

"I will refrain from commenting on foreign exchange intervention."

"Foreign exchange rates are determined by reflecting fundamentals in the market."

"Stable foreign exchange rates are desirable."

"There is concern about unilateral movements in foreign exchange rates."

- Chief Cabinet Secretary Lin

"Excessive fluctuation in foreign exchange rates is not desirable."

"We want to closely monitor market trends and take thorough measures."

Kanda, Vice Minister of Finance

"We will respond appropriately to excessive fluctuations or disorderly movements."

"A 5% fluctuation in one month is quite volatile."

"The US Treasury Secretary's remark that intervention should be rare in a floating exchange rate system is reasonable."

- 13:30 Revised May mining and industrial production (flash: +2.8% month-on-month)

- Time undecided China June exports (YoY forecast: +8.0%, May: +7.6%)

- Time undecided China June imports (YoY forecast: +2.5%, May: +1.8%)