In the afternoon of the 14th, there are three points to focus on for trading.

- The Nikkei Average fell for the third day, perhaps disliking a political vacuum with Mr. Kishida not running for Prime Minister.

- The USD/JPY significantly fell due to the decline in Japanese stocks.

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

The Nikkei Average fell for the third day, perhaps disliking a political vacuum with Mr. Kishida not running for Prime Minister.

The Nikkei average fell for the third consecutive day. It closed the morning session at 36,155.26 yen (approximately 1.09 billion shares traded), down 77.25 yen (-0.21%) from the previous day.

The US stock market rose on the 13th. The Dow Jones Industrial Average closed up 408.63 points (+1.04%) at 39,765.64, the Nasdaq rose 407.00 points (+2.43%) to 17,187.61, and the S&P 500 rose 90.04 points (+1.68%) to 5,434.43. The news that the July Producer Price Index (PPI) was below expectations boosted buying expectations for rate cuts this year, and stocks rose in early trading. Expectations for further inflation improvement were also high for the Consumer Price Index (CPI), which will be announced on the 14th, and buying prevailed throughout the day. The market rallied in late trading, driven by strong demand for high-tech stocks in anticipation of lower interest rates.

The Tokyo market started trading with a buying bias due to the rise in the US stock market. After opening, the Nikkei average rose as high as the 36,600 yen level, but then faced heavy selling pressure due to a reaction to the previous day's rise. When buying stopped, news such as "Kishida will not run in the September party presidential race" began to circulate before 11:00 am, and the market showed weak movements centered on semiconductor stocks, causing the Nikkei average to fall into negative territory from the previous day. In Nikkei average constituent stocks, Mercari <4385> plummeted due to concerns about growth slowdowns following earnings announcements, and Citizen <7762> was also sold due to disappointing earnings. Tokyo Electron <8035> and Laser Tech <6920> lost momentum after being in the buying forefront and sank into negative territory from the previous day. In addition, Comsys HD <1721>, Nippon Electric Glass <6988>, Hoya <7741>, Nitori Holdings <9843>, and Shinnetsu Chemical <4063> fell. On the other hand, Sapporo HD <2501> rose sharply due to its earnings announcement, and Fujikura <5803> was bought on positive reports from domestic securities companies. Insurance stocks, such as Dai-ichi Life HD <8750>, Tokio Marine HD <8766>, and MS&AD <8725>, also rose. In addition, social network service provider Socionext <6526>, IHI <7013>, Mitsukoshi-Isetan HD <3099>, Konica Minolta <4902>, and Resonac <4004> were bought.

Among Nikkei Stock Average constituent stocks, Mercari <4385> suffered a sharp fall due to earnings announcements, and Citizen <7762> was also sold due to disliking of earnings. Tokyo Electron <8035> and Laser Tech <6920> lost momentum after the buying trend and dropped into negative territory from the previous day. In addition, Comsys HD <1721>, Nippon Electric Glass <6988>, Hoya <7741>, Nitori Holdings <9843>, and Shin-Etsu Chemical <4063> fell. On the other hand, Sapporo HD <2501> rose significantly due to substantial earnings results, and Fujikura <5803> saw buying induced by positive reports from domestic securities companies. In addition, insurance stocks such as Dai-ichi Life HD <8750>, Tokio Marine HD <8766>, and MS&AD <8725> rose. Socionext <6526>, IHI <7013>, Mitsukoshi-Isetan HD <3099>, Konica Minolta <4902>, and Resonac <4004> were also bought.

Meanwhile, Sapporo HD <2501> rose significantly based on its earnings results, and Fujikura <5803> saw buying as a result of positive reports from domestic securities companies. Insurance stocks, such as Dai-ichi Life HD <8750>, Tokio Marine HD <8766>, and MS&AD <8725>, also rose. In addition, Socionext <6526>, IHI <7013>, Mitsukoshi-Isetan HD <3099>, Konica Minolta <4902>, and Resonac <4004> were bought.

In terms of industry, precision instruments, chemicals, warehousing and transportation-related businesses, textiles and garments, and fisheries and agriculture were among the decliners, while insurance, transportation equipment, petroleum and coal products, non-ferrous metals, and wholesale trades rose.

At the press conference held at 11:30 a.m., Prime Minister Kishida announced that he would not run in the September Liberal Democratic Party presidential election, leaving a political void until the end of September. Although the approval rating among the public was low, the Kishida administration, which promoted "asset management country," could be considered a positive force in the securities industry. We believe that the delay in responding to the excessive depreciation of the yen caused the current volatile market, but the achievements of the Kishida administration, including the Nikkei Average and TOPIX both reaching their all-time highs, were significant. In the future, as the race for the LDP presidency heats up, it will be interesting to see if candidates who continue to promote "asset management country" will emerge. In the Tokyo market's afternoon session, there is a possibility that investors may become disenchanted with the political void, among other factors, and sell off core stocks. We should be vigilant about a further widening of the fall in the Nikkei average.

The USD/JPY significantly fell due to the decline in Japanese stocks.

On the morning of the 14th, the USD/JPY was soft and fell from 147.51 yen to 146.07 yen on the Tokyo market. Mr. Kishida announced his non-participation in the upcoming Liberal Democratic Party presidential election, favoring yen buying with the decline of the Nikkei Stock Average. Also, the cross-yen fell due to the Reserve Bank of New Zealand's interest rate cut.

-The trading range up to now is the USD/JPY 146.91-147.51 yen, Euro/JPY 160.65-161.23 yen, and Euro/USD 1.0929-1.0937 dollars.

Check stocks for the afternoon session

- Seven stocks, including Astroscale Holdings (186A) and Nihon Kiso Giken (1914), reached their 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 July Producer Price Index: +0.1% from preceding month (estimation: +0.2%, June: +0.2%)

- US July Producer Price Index - Core: 0% from preceding month (estimation: +0.2%, June: +0.3%←+0.4%)

- US July Producer Price Index: +2.2% from previous year (estimation: +2.3%, June: +2.7%←+2.6%)

- US July Producer Price Index - Core: +2.4% from previous year (estimation: +2.6%, June: +3.0%)

[Important Person's Remarks]

- Reserve Bank of New Zealand

- "The weakness of the domestic economy has become apparent, and the inflation rate has also declined."

- "There is room to start easing monetary policy."

- "It is necessary to maintain a tightening posture for the time being."

- "The pace of easing in the future, adaptation of pricing behavior, and the stability of inflation expectations depend concretely on the change of the Liberal Democratic Party. The most clear first step to demonstrate that the Liberal Democratic Party will change is for me to step down."

Prime Minister Kishida

- "The most clear first step to demonstrate that the Liberal Democratic Party will change is for me to step down."

Not applicable.

- 3:00 p.m. UK July Consumer Price Index (YoY estimation: +2.3%, June: +2.0%)

- 3:00 p.m. UK July Producer Price Index Output (YoY estimation: +1.2%, June: +1.4%)