Japan is about to extend stock trading hours!

According to the latest news, the Tokyo Stock Exchange announced that starting from November 5, the trading hours of the Tokyo Stock Exchange will be extended by 30 minutes as planned. The exchange stated that a rehearsal will be conducted on November 3.

On September 20 last year, the Tokyo Stock Exchange in Japan announced its decision to extend market trading hours by 30 minutes starting from November 5, 2024, to provide maximum trading opportunities for market participants.

Trading hours extended by 30 minutes.

Tokyo Stock Exchange recently announced that starting from November 5, trading hours will be extended by 30 minutes as planned to enhance market efficiency and competitiveness. The exchange mentioned that a rehearsal will be held on November 3, and around 6:30 PM Japan time on November 3, confirmation will be made on the Japan Exchange Group website that everything is proceeding as scheduled.

Starting from November 5, the closing time of the Tokyo Stock Exchange will be extended from 3:00 PM local time to 3:30 PM. After this adjustment, the Tokyo Stock Exchange's trading hours will reach 5.5 hours for the entire day.

According to reports in Japanese media, stock brokerage firms in Japan are using online videos and promotional activities at branches to inform customers that this move may bring investment opportunities. Yamagata Hikari, the online trading manager at the Japanese securities company Iwai Cosmo Securities, stated that extending trading hours will provide investors with more opportunities, so they need to understand the changes around the afternoon close. Extending the time will also benefit brokerage firms as it may increase trading volume and create additional business opportunities.

Reports suggest that the Tokyo Stock Exchange hopes that extending hours will prompt listed companies to review their practices of releasing information after the market closes. Currently, nearly 80% of companies disclose financial reports and other important information after 3:00 PM, believing it reduces the trading volatility of their stocks. However, the Tokyo Stock Exchange wants listed companies to follow the principle of timely disclosure of crucial information to investors and release such information in advance.

On September 20 last year, the Tokyo Stock Exchange in Japan announced that starting from November 5, 2024, the market trading hours will be extended by 30 minutes. The closing time will be extended from 3:00 pm local time to 3:30 pm, while introducing a closing call auction. At that time, the TSE emphasized that this move was to adapt to changes in the market environment and diverse investor demands, as well as to further enhance the convenience of market participants and increase the global competitiveness of the TSE.

Tokyo Stock Market Rebounds

On October 9th, the two major stock indexes in the Tokyo stock market rebounded. At the close, the Nikkei 225 Index rose by 0.87% to 39277.96 points; and the TOPIX Index in Japan rose by 0.30% to 2707.24 points.

In terms of heavyweight stocks, Shiseido Company,Limited Sponsored ADR, Kawasaki Heavy Industries rose by over 3%; Recruit Holdings Co., Ltd. rose by 2.68%, hitting a historical record high; Canon Inc., KDDI rose by over 2%. Nintendo fell by 2%, Mitsui & Co. fell by 1.88%, Mitsubishi Corp. fell by 1.65%, Itochu Corp. fell by 0.98%.

Since 2023, the Japanese stock market has been continuously bullish, once becoming one of the best-performing markets globally. By mid-July this year, the Nikkei 225 Index hit a record high of 42426.77 points. Subsequently, the Japanese stock market experienced a wave of selling, and in early August, it was hit hard. In just 3 trading days, the Nikkei 225 Index plummeted by 7600 points, a drop of over 19%, reaching a low of 31156 points. At that time, market analysts believed that disappointing U.S. economic data coupled with the Bank of Japan's rate hike were the main reasons for the severe blow to the Japanese stock market.

On July 31, the Bank of Japan simultaneously played the cards of additional rate hikes and reduction in bond purchases during the monetary policy meeting. It decided to raise the policy interest rate from around 0% to 0.25% and lower the monthly average bond purchase amount from 6 trillion yen to 3 trillion yen. Meanwhile, the Federal Reserve, at the end of its monetary policy meeting on the same day, also hinted at an increasing possibility of rate cuts in September. During the same period, U.S. economic data performed well below expectations. Due to the expectation of a narrowing U.S.-Japan interest rate differential, a trend of buying yen and selling dollars emerged, leading to continuous appreciation in the yen exchange rates in the Tokyo foreign exchange market. With the Japanese economy highly dependent on overseas operations, the U.S. economic downturn increased global economic uncertainty. Coupled with the yen appreciation negatively impacting profit expectations for Japanese export companies, investor panic escalated, prompting many to 'run for cover.'

Following the panic in early August, sentiment in the Japanese stock market slowly recovered. Since August 6, the Nikkei 225 Index has risen by 7820 points, nearly 25%, but it is still more than 3100 points below the historical high of 42426.77 points set on July 11.

According to an average forecast of 9 analysts surveyed by Bloomberg from September 27 to October 7, although it is unlikely that the Nikkei 225 Index will revisit the record set in July, it may rise by 1.3% to 39844 points by the end of this year. The average estimates of seven analysts show that the TOPIX Index will rise by 2.1% to 2797 points, bringing the year-on-year increase of the Nikkei 225 Index to 19% and the TOPIX Index to 18%.

The analyst has been consistently raising profit estimates for the TOPIX index this year, expecting earnings per share to increase to around 188 points, as the strengthening yen weakens and companies pass on cost increases to consumers. As of June, net income for the largest 500 listed companies in Japan reached a historical high of 15 trillion yen (101 billion USD).

Daisuke Uchiyama, Senior Strategist at Tokyo Okayama Securities, stated: "There are many things that worry investors, but this has not completely disrupted investor sentiment." He mentioned that the strong prospects for corporate earnings may help boost the direction of the Japanese stock market towards December.

The biggest threat to earnings will be the rebound of the yen. With the Bank of Japan moving towards normalizing monetary policy, the yen has risen 12% against the US dollar in the past three months. At the same time, the rebound of the Chinese stock market may shift people's focus away from Japan.

Ikuo Mitsui, a fund manager at Aizawa Securities, stated that as the interest rate gap between the USA and Japan is narrowing at a slower pace, concerns about the yen currently pose a smaller problem for exporters. He added that companies have successfully passed higher input costs on to customers.

Recently, a piece of news from the "Stock God" Buffett also caught the attention of investors. According to media reports, Berkshire Hathaway entrusted banks last week to issue a Japanese yen bond in the global market, suggesting that he may increase his holdings of Japanese assets. Market observers believe that Berkshire's return to the Japanese bond market has led to speculation that Buffett may be raising funds to invest in the Japanese market. Chief analyst Eiji Kinouchi of Daiwa Securities expressed the opinion that insurance companies and shipping companies may become Buffett's next targets.Technical AnalysisAnalyst Eiji Kinouchi believes that insurance companies and shipping companies may become Buffett's next targets.

Berkshire's fundraising plans are closely monitored by stock market investors, as earlier this year the company purchased stakes in Japan's five largest trading companies, which helped push the Nikkei 225 index to a historical high. In February this year, Berkshire mentioned in its annual shareholder letter that the practice of issuing yen bonds provided most of the funds for investing in Japanese companies.

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