The Nikkei average rebounded significantly, closing the morning session at 34,416.32 yen (+9.40%) up 2,957.90 yen from the previous day's close (approximate trading volume of 1.706 billion shares).
The US stock market fell sharply on the 5th. The Dow Jones Industrial Average closed at 38,703.27, down 1,033.99 dollars (-2.60%), the Nasdaq at 16,200.08, down 576.08 points (-3.43%), and the S&P 500 at 5,186.33, down 160.23 points (-3.00%). With concerns of a recession due to weak July employment statistics, selling continued after the opening as well. In addition, with the rapid deterioration of investor sentiment due to the worldwide stock market decline, profit taking accelerated throughout the day. The high-tech sector also dropped and, with slow recovery, selling accelerated again towards the end.
The US stock market dropped sharply, but as the fall in US stocks was factored in from the previous day's Tokyo market, the Tokyo market opened with a significant rebound. With many stocks showing buying interest, the Nikkei average rapidly expanded its gains. The exchange rate increased to the 144 yen level and the yield on the 10-year government bond, which is an indicator of long-term interest rates, also returned to 0.910%, bringing calm back to the currency and interest rate markets. As a result, the Nikkei average rose to 34,911.80 yen at one point. The trading value of the Prime Market in the morning session was in the range of 3.8 trillion yen, and the trading volume was as lively as the previous day.
In the Nikkei average selection stocks, Nippon Steel <5631>, which was evaluated for the first quarter earnings, was in a stop-high buying position, as was Keyence <6861>, which set a new annual low yesterday. In addition, Kikkoman <2801>, Orix <8591>, Tokio Marine <8766>, and Fuji Electric <6504> were in the stop-high buying position, while Renesas Electronics <6723>, Ebara Corporation <6361>, Tokyo Electron <8035>, TDK <6762>, Nippon Electric Glass <6988>, and Laser Tech <6920> rose significantly.
Meanwhile, Ajinomoto <2802> fell as its Q2 net profit did not meet market expectations, and Yamato HD <9064>, JFE Holdings <5411>, Sumitomo Mitsui <8316>, and Konica Minolta <4902> were sold. Only five Nikkei average selection stocks fell.
All industries were bought, with noticeable rises in marine transportation, other financial businesses, insurance, transportation equipment, and rubber products.
Although it became a correctional movement due to overselling, the Nikkei average VI is still high at 49 points, indicating that volatility is still high. The market is still vulnerable to fluctuations, so be mindful of the possibility of sudden changes in the afternoon. If the current upward trend continues, the Nikkei average will surpass its largest increase ever (2,676.55 yen on October 2, 1990). However, this is only about a 30% rebound from the drop from the all-time high in July. It will likely take several months for buying by long-term investors to return now that the market, once broken, has regained its composure. In the afternoon, while being cautious of decreasing gains, let's keep an eye on the Nikkei average, TOPIX, Growth Market 250 Index, and other major indices to see how much they can recover.