In the afternoon trading on the 23rd, we want to focus on the following three points.

- The Nikkei average fell and swung to a stronger yen due to Governor Ueda's statement at the Bank of Japan.

- The dollar-yen exchange rate is weak and we are watching the Bank of Japan's policy direction.

- Tokyo Electron <8035> was the top declining stock contributor, followed by Advantest <6857>.

The Nikkei average fell and swung to a stronger yen due to Governor Ueda's statement at the Bank of Japan.

The Nikkei average fell. It closed the morning trading at 38,117.44 yen, a decrease of 93.57 yen (-0.24%) compared to the previous day's closing price (with an estimated trading volume of approximately 0.6 billion 30 million shares).

The U.S. stock market fell on the 22nd. The Dow Jones Industrial Average closed at 40,712.78, down 177.71 points (-0.43%), the Nasdaq closed at 17,619.36, down 299.63 points (-1.67%), and the S&P 500 closed at 5,570.64, down 50.21 points (-0.89%). Weekly jobless claims did not surprise, and concerns about rapid deterioration in the labor market receded and rose after the opening. Existing home sales exceeded expectations, leading to selling focused on high-tech. Afterwards, concerns over Federal Reserve Chairman Powell's speech intensified selling, and the market widened its decline towards the end.

Although U.S. stocks fell, the Tokyo market had a cautious start. Bank of Japan Governor Ueda stated during the recess, "Financial markets continue to be in an unstable situation," and added, "We will continue to closely monitor their movements with a high level of tension." He also explained, "Our basic stance remains unchanged, which is to adjust the degree of monetary easing as the certainty of the realization of economic and price outlooks increases." Despite taking into account market sensitivities, his remarks during a press conference on July 31 did not change significantly, which led to a strengthening yen and weakening dollar, temporarily pushing the exchange rate to the 145.20 yen per dollar range. As a result, the Nikkei average, which had been trading in positive territory compared to the previous day, moved into negative territory.

In the Nikkei stock index stocks, the Philadelphia Semiconductor Stock Price Index (SOX index) fell by more than 3% compared to the previous day, resulting in overall selling of semiconductor stocks such as Lasertec <6920>, Advantest <6857>, Socionext <6526>, Renesas Electronics <6723>, Tokyo Electron <8035>, etc. In addition, Furukawa Electric <5801>, Fujikura <5803>, Ebara Corporation <6361>, and Resonac <4004> also declined.

On the other hand, Sharp <6753> saw a sharp increase due to reports of SoftBank <9434> making a 100 billion yen investment. Stocks of Taisei Corporation <1801> and Obayashi Corporation <1802> were also bought based on securities companies' reports. Additionally, Hitachi Zosen <7004>, Meiji Holdings <2269>, Konica Minolta <4902>, and Comsys Holdings <1721> were bought.

By industry, electric appliances, insurance, wholesale trade, nonferrous metals, and glass & stone products declined, while construction, precision instruments, other financing business, petroleum & coal products, and warehouse & transportation-related industries rose.

Exchange rates during lunchtime continued around 145.50 yen per dollar, and the high yen and weak dollar have eased following a statement by Governor Ueda of the Bank of Japan. Market attention is focused on the speech by Chairman Powell of the Federal Reserve at the Jackson Hole meeting tonight at 11:00 PM, and the Tokyo market is expected to remain calm in the afternoon. The Nikkei average is likely to remain consolidated around the 38,000 yen level, but it should be noted that Governor Ueda of the Bank of Japan will attend the closing review of the House of Councillors' Financial Affairs Committee in the afternoon, so it is advisable to pay attention to exchange rate movements just in case.

■ Dollar-yen remains weak, watching the Bank of Japan's policy direction

On the morning of the 23rd, the Tokyo market saw a weak tone for the dollar-yen, dropping from 146.33 yen to 145.30 yen. Governor Ueda of the Bank of Japan expressed the view during the closing review of the National Assembly on the 23rd that the Bank would assess the economic and price situation and adjust the degree of easing. While the response was limited, the yen shifted towards buying.

The trading range up to this point is as follows: the dollar-yen ranged from 145.30 yen to 146.33 yen, the euro-yen ranged from 161.69 yen to 162.62 yen, and the euro-dollar ranged from 1.1110 dollars to 1.1128 dollars.

Check stocks for the afternoon session

- Will Smart<175A>, Iore<2334>, and other 8 stocks hit the upper limit.

*Includes temporary stopper (indicated price)

- Tokyo Electron <8035> was the top declining stock contributor, followed by Advantest <6857>.

Economic indicators and remarks by important people

[Economic indicators]

- National Consumer Price Index (excluding fresh food) in July: +2.7% year-on-year (estimate: +2.7%, June: +2.6%).

[Important Person's Remarks]

- Haruhiko Kuroda Bank of Japan Governor

Maintain an accommodative monetary environment to support the economy.

The dollar-yen exchange rate has seen a correction in one-sided yen depreciation.

Consider the risk of inflation upside due to price outlook and rise in import prices in July hike.

Factors include the early August stock market decline and rapid spread of concerns over a slowdown in the US economy.

The early August yen appreciation and dollar depreciation are also influenced by the Bank of Japan's policy changes.

Assess the impact of financial capital markets on the economy and prices, as well as the effects of the July rate hike.

Adjust the degree of accommodation if the increasing certainty of realizing the economic and price outlook can be confirmed as expected.

- 13:00 - BOJ Governor Uchida attends the closing session of the Diet (House of Councillors Committee on Finance and Banking).

Not applicable.