In the morning session on the 23rd, we want to focus on the following three points.

Susceptible to short-term buying and selling influenced by foreign exchange market trends.

No earnings announcements

Key focus of the morning session: Denso invests 70 billion yen in new factory in Aichi, increasing production of ECU boards.

Susceptible to short-term buying and selling influenced by foreign exchange market trends.

In the Japanese stock market on the 23rd, there is a sense of stagnation ahead of important events. However, there seems to be strong buying interest in anticipation of buying on dips after the events. On the 22nd, the US market saw the Dow Jones Industrial Average fell 177 points and the Nasdaq dropped 299 points. Despite no surprise in the weekly jobless claims, there were moments of buying as concerns about rapid deterioration in the labor market receded. However, with the US existing home sales exceeding expectations, long-term US interest rates rose and turned to selling, particularly in the high-tech sector. Furthermore, as the speech by Federal Reserve Chairman Powell is approaching, there has been a dominant trend of position adjustments. The settlement value of Chicago Nikkei 225 futures was 180 yen lower than Osaka, at 38,050 yen. The exchange rate of the yen is fluctuating around 146 yen 20 sen against the dollar.

Starting with a slightly bearish tone due to profit-taking after aligning with Chicago futures. In the US, there has been a trend of position adjustments ahead of the speech by Powell, the chairman of the Federal Reserve Board (FRB). However, a rate cut at the September Federal Open Market Committee (FOMC) meeting was seen as certain, and the firmness of the downside was taken into account. In the night session, the Nikkei 225 futures temporarily rose to 38,650 yen, then softened after reaching the 75-day moving average at the same level, and there were moments when it fell below the significant level of 38,000 yen, but it maintained the closing price of 38,000 yen.

In the Tokyo market, cautious trading is expected due to the wait for the speech by Powell, the chairman of the Federal Reserve Board (FRB). In addition, Bank of Japan Governor Ueda will make statements during the closing hearings in both houses of the Diet. In the morning, he will speak at the Lower House Finance and Financial Affairs Committee, and in the afternoon, he will be questioned at the Upper House Budget and Financial Affairs Committee, so the market development will be influenced by the movement of the foreign exchange market based on the contents of his remarks.

Amid a lack of significant volume expansion in demand and supply, it is likely to be easily swayed by short-term trading influenced by the movements in the foreign exchange market. However, it is expected that the tone of hawkish comments, which are considered to have been one of the causes of the sharp drop in August, may decrease, as the Bank of Japan Governor is expected to show a stance of proceeding with interest rate hikes. With the yen trading slightly weaker at 146 yen per dollar, there is also a likelihood of rebalancing movements.

As for investment opportunities, transactions related to indices are likely to be the main focus, but it is believed that there will be a tendency to buy back export-related stocks if the yen weakens. In addition, with NVIDIA's earnings announcement scheduled for next week, there also seems to be strong buying interest in semiconductor stocks on dips.

No earnings announcements

Materials of concern in the morning session

- The Nikkei Average is up (38,211.01, +259.21)

- 1 dollar = 146.20-30 yen

- Crude oil futures in the USA are up (73.01, +1.08)

Expectations for inflation to ease in the US.

Active share buybacks

Request for improvement in corporate value by the Tokyo Stock Exchange.

Denso <6902> to invest 70 billion yen in a new factory in Aichi, increasing production of ECU boards.

JFEHD <5411> JFE Steel to acquire partial rights to Australian coal mines for 162 billion yen from Nippon Steel.

Mitsubishi UFJ <8306> Mitsubishi UFJ Bank to make additional investment of 49 billion yen in Indian digital finance.

Tsubakimoto Chain <6371> Group's Nexaware to streamline logistics warehouse operations and provide data analysis services.

Denso <6902> to allocate development resources to the electrification shift for CASE.

Toyota Motor <7203> to resume production of "Yaris Cross" and others on the 2nd of next month.

- Japan Airlines <9201> Toyota Tsusho, etc. supply biofuel at Shin-Chitose for airport ground vehicles.

- JT <2914> to acquire a major U.S. tobacco company for 378 billion yen.

- Moriroku Holdings <4249> Moriroku Technology, equipment renewal in the USA, improving profitability of car resin components.

- Sanko <5985> Mr. Nara, quintupling busbar production in Japan and the USA.

- Honda <7267> to unveil a new grade of "N-BOX" on the website.

- Autobacs <9832> prevents vehicle theft with a smartphone, controlling the engine from the app.

- Suzuki <7269> Vice President Kenichi Ayukawa aims for a 50% market share.

- Minebea Mitsumi <6479> enters the drone antenna market, achieving high-precision position measurement.

- NEC <6701> Verification of AI utilization in finance, jointly with 10 regional banks and others

- NTT <9432> NTT West Japan, open public communication tunnel "Tohdo"

- Osaka Gas <9532> Panasonic and EV charger control for detached houses, demonstration starts for energy optimization

- Kurabo <3106> Shinji Nishigaki opens a new building in Kumamoto, creating synergy

- Achilles <5142> Introduces rapid exchange and disposal of insider information for medical tent use

☆ Schedule of events in the morning session

- 08:30 National consumer price index (excluding fresh food) for July (year-on-year forecast: +2.7%, June: +2.6%)

- 09:30 Ueda, Governor of the Bank of Japan, attends the closed session of the Diet (House of Representatives Financial Committee).

Not applicable.