The Nikkei average rebounded for the first time in 8 days and ended the morning session at 38,057.61 yen (+0.50%) up 188.10 yen from the previous day (with an approximate trading volume of 920 million shares).
The U.S. stock market on the 25th was mixed. The Dow Jones Industrial Average rose 81.20 dollars (+0.20%) to 39,935.07 dollars, the Nasdaq fell 160.68 points (-0.93%) to 17,181.73, and the S&P 500 fell 27.91 points (-0.51%) to 5,399.22 at the end of the trading day. Risk aversion remained strong, and the market opened mixed. However, due to the better-than-expected growth in domestic gross domestic product (GDP) and consumption in the April-June quarter, the pessimistic view of the economy retreated and buying back prices regained the positive territory. However, pre-closing sales ahead of the release of important inflation indicators capped the upside, and the Nasdaq lost steam due to weakness in high-tech stocks, ending mixed.
Although the Dow rose, the Tokyo market started trading with a predominance of selling as U.S. high-tech stocks continued to be weak. The Nikkei average widened its loss to 37,668.93 yen at one point, but bounced back to the 38,000 yen range after the selling spree. It is reported that it was reassuring that the exchange rate was about 2 yen cheaper against the dollar than at 5:00 pm the previous day, at around 153.80 yen per dollar, and that overseas U.S. futures were trading in the positive territory.
In selected Nikkei average stocks, Hino Motors <7205>, Fujitsu <6702>, Canon <7751>, and Tokuyama <4043> were the most bought in anticipation of good results, as well as defense-related stocks such as IHI <7013> and Mitsubishi Heavy Industries <7011>. Nippon Shinyaku <4519>, SUMCO <3436>, Hitachi <6501>, Teijin <3401>, and Fanuc <6954> were also bought.
On the other hand, some semiconductor stocks such as Renesas Electronics <6723>, Laser Tech <6920>, Tokyo Electron Ltd. <8035>, and Advantest <6857> were sold under pressure from the Nasdaq decline, as well as auto-related stocks such as Nissan <7201>, Toyota <7203>, and Isuzu <7202>. In addition, Nippon Steel <5401>, Kao <4452>, and Kikkoman <2801> were sold.
In terms of industry types, petroleum and coal products, metal products, machinery, banking, and mining rose, while transportation equipment, fisheries and agriculture, air transportation, electric and gas utilities, and services fell.
The exchange rate has rebounded to around 1 dollar and 54 yen in the morning, and the trend of violent yen appreciation and dollar depreciation has eased. Risk-off sentiment has increased due to the steep decline in the Japanese and American stock markets, and speculation on interest rate hikes at the Bank of Japan's Financial Policy Meeting has retreated somewhat. The 10-year Japanese government bond yield, which is an indicator of Japan's long-term interest rates, temporarily fell to 1.050%. It seems that the dissolution of speculative yen positions by traders involved in the shrinkage of the Japan-US interest rate differential has finally stalled. In the afternoon Tokyo market, we are likely to see a struggle around the 38,000 yen level, taking into account the calmness of the exchange rate, etc. Although it is in a situation where autonomous rebound is easy due to the sharp decline of the previous day, it is unlikely that there will be active buying on dips before the next week's Japan-US-China Central Bank Meeting due to weak semiconductor stocks. Be aware that it may fall back into the negative range compared to the previous day by the end of the day for eight consecutive days.