The Nikkei average fell for the 6th consecutive day. As of the morning session, it ended the morning trading session at 39,508.84 yen (approx. 0.7 billion 80 million shares traded) down 85.55 yen (-0.22%) from the previous day.
The US stock market fell on the 23rd. The Dow Jones average closed down 57.35 points (-0.14%) at 40,358.09, the Nasdaq down 10.22 points (-0.06%) at 17,997.35, and the S&P 500 down 8.67 points (-0.16%) at 5,555.74. With earnings reports from companies impending and cautious wait-and-see sentiment, the market was mixed and opened flat. In addition, adjustments continued as important inflation and economic indicators to be announced this week were awaited, and throughout the day trades were mixed with bullish buying supported by good earnings and expected interest rate cuts, but the market turned downward towards the end and closed lower.
The Tokyo market also opened with a predominance of selling due to the fall in US stocks and the strengthening of the yen. The Nikkei average showed a stable movement, rebounding after expanding its fall of more than 300 yen from the previous day's close, but ended the morning below the previous day's level. Persistent buying supporting good earnings and expected interest rate cuts helped maintain a solid base, but aggressive buying and selling before the end of the month was withheld, and the prime market traded for less than 2 trillion yen.
Among the Nikkei average adopted stocks, Mitsubishi Motors <7211> fell sharply due to weak first-quarter earnings, and Sumitomo Realty <8830>, Tokyu Real Estate HD <3289> and other real estate stocks were weak as the 10-year government bond yield, an indicator of long-term interest rates, rose to 1.07%. Isuzu <7202>, Sumitomo Chemical <4005>, Amada <6113>, Hitachi Construction Machinery <6305>, and Sharp <6753> were sluggish.
Nidec <6594> rose due to first quarter operating profit exceeding market expectations, and Toyota <7203> also rose due to improved capital efficiency expectations through the elimination of holding shares. In addition, Chugai Pharmaceutical <4519>, Screen HD <7735>, HOYA <7741>, Aozora Bank <8304>, Murata Manufacturing <6981>, and Mitsubishi Electric <6503> were bought.
In terms of industry sectors, only four sectors saw an increase: precision instruments, pharmaceuticals, transportation equipment, and electric appliances. Electric and gas, marine transportation, air transport, land transportation, and real estate declined.
- The exchange rate is around 155.20 yen to the dollar and 168.30 yen to the euro. Due to the yen's strength against major currencies compared to the previous day, the Nikkei average is likely to be in a narrow range slightly below the previous day's closing level.
- Due to the proximity of the tripartite central bank meeting and the increasing uncertainty about the U.S. presidential election in November, speculators seem to be continuing to unwind their short yen positions. According to the Commodity Futures Trading Commission's (CFTC) data as of July 16, the net yen selling position was 1,072 sheets or a net selling position of 150,000 sheets, which was the second largest (807,700 sheets net selling position online in June 2007) since July 2, when the net selling position of 184,223 sheets was recorded. Given that the net selling position was in the 50,000 sheet range in January of this year, there is still likely to be some position adjustments. If the strong yen trend continues at the time of earnings announcements, the expectation of earnings based on a weaker yen will likely decline. This could weigh down on the Nikkei average.