In the afternoon trading on the 6th, attention should be paid to the following three points.
Nikkei average falls for the 4th consecutive day, strong caution towards US employment statistics causing a back and forth movement.
Dollar-yen shows hesitant decline, keeping an eye on US interest rates.
Top contributors to the decline were Tokyo Electron <8035>, with the second place being Daikin <6367>
■ Nikkei average falls for the 4th consecutive day, strong caution towards US employment statistics causing a back and forth movement
The Nikkei Average continued to decline for the 4th day. It ended the morning session at 36,568.05 yen (volume estimate: 0.82 billion shares), down 89.04 yen (-0.24%) from the previous day.
The U.S. stock market was mixed on the 5th. The Dow Jones Industrial Average closed at 40,755.75, down 219.22 points (-0.54%), the Nasdaq rose 43.36 points (+0.25%) to 17,127.66, and the S&P 500 closed at 5,503.41, down 16.66 points (-0.30%). The sell-off was driven by unexpectedly weak August ADP employment statistics, raising concerns about the labor market and economic slowdown. However, the market recovered as the August ISM non-manufacturing index unexpectedly improved, easing concerns about a slowdown in the economy. Nevertheless, profit-taking sales were driven by caution ahead of the U.S. employment report scheduled for release on the 6th, leading to a further decline in the Dow and widening losses. The Nasdaq, supported by a rebound in semiconductor maker Nvidia, rose slightly, ending mixed.
Despite the mixed performance of U.S. stocks, the Tokyo stock market started trading with a buying bias in response to a rebound against the recent decline. The purchasing speculation, believed to be pension-related, remained strong, pushing the Nikkei Average up to 36,898.28 yen, but the progress of the yen's appreciation and other factors reduced the gains. Given the high caution towards tonight's U.S. employment report, active trading was withheld, resulting in a stalemate at the previous day's closing level.
Among the stocks included in the Nikkei Average, JFE Holdings <5411> was sold off due to negative reports from securities companies. Defense-related stocks such as Mitsubishi Heavy Industries <7011> and Kawasaki Heavy Industries <7012> also declined. In addition, Hitachi <6501>, Keyence <6861>, Daikin <6367>, SMC <6273>, and Laser Tech <6920> all fell.
On the other hand, Shiseido Co., Ltd. <4911>, which has been updating its year-to-date low, has seen buying considered to be a technical rebound, as well as Meiji Holdings <2269>, AEON <8267>, Nitori Holdings <9843>, and other stocks that benefit from a stronger yen have risen. In addition, Terumo <4543>, Shimizu Corporation <1803>, Sekisui House <1928>, Kao <4452>, and Fast Retailing <9983> were bought.
In terms of industry sectors, the electric machinery, machinery, iron & steel, nonferrous metals, and securities and commodity futures trading industries declined, while the electric and gas industry, precision instruments, warehousing and transportation-related industries, construction industry, and retail trade industry rose.
In the afternoon session of the Tokyo market, there is a growing sense of caution towards tonight's US employment statistics, which is leading to a wait-and-see attitude and the Nikkei Stock Average is expected to be in a stalemate around the previous day's closing level. With the yen tending to strengthen and the dollar weakening, there is a possibility of a further decline in the Nikkei Stock Average due to the progress of yen appreciation, but relatively speaking, the exchange rate during Tokyo time has been relatively stable, so the possibility of a further decline in the Nikkei Stock Average in the afternoon is considered to be low.
■ Watch out for the dollar-yen exchange rate and US interest rates.
In the morning session of the Tokyo market on the 6th, the dollar-yen exchange rate showed a sluggish decline. In the early morning, there was a buyback of the dollar, and it rose to 143.48 yen at one point. However, after the Nikkei Stock Average started high and then lost momentum, it was pushed down by yen buying and fell to 143.10 yen. However, the yield on the US 10-year bonds remained firm and weakened the selling pressure on the dollar.
So far, the trading range has been 143.10 yen to 143.48 yen for the dollar-yen exchange rate, 159.01 yen to 159.40 yen for the euro-yen exchange rate, and 1.1108 dollars to 1.1114 dollars for the euro-dollar exchange rate.
Check stocks for the afternoon session
Body note <4014>, Mercury <5025>, and other 6 stocks hit the daily price limit
*Includes temporary stopper (indicated price)
Top contributors to the decline were Tokyo Electron <8035>, with the second place being Daikin <6367>
Economic indicators and remarks by important people
[Economic indicators]
Sunday, July Household Spending: +0.1% year-on-year (est. +1.2%, June: -1.4%)
[Important Person's Remarks]
Coolzby, Chicago Fed President
"Economic data justifies multiple rate cuts."
"Further warning signs are seen in the labor market."
- Shinjiro Koizumi, former Minister of the Environment
"(Upon running for the LDP leadership election) I immediately instructed to consider economic measures."
"If elected as Prime Minister, I will dissolve the Lower House as soon as possible."
- 14:00, July Economic Outlook Index, preliminary value (estimate: 109.4, June: 109.0).
- 15:00 German industrial production in July (MoM forecast: -0.5%, June: +1.4%).
- 15:00 German trade balance in July (forecast: +20.9 billion euros, June: +20.4 billion euros).