In the afternoon trading on the 29th, the following three points should be noted:

The Nikkei Average continues to rise, with financial stocks standing out, but is the focus on buying back?

The dollar-yen rate is weak, following the drop in US interest rates.

・Top gainers include SoftBank G <9984> in first place, followed by Advantest <6857> in second place.

The Nikkei Average continues to rise, with financial stocks standing out, but is the focus on buying back?

The Nikkei average continued to rise. It closed the morning session at 38,819.51 yen, up 213.98 yen (+0.55%) from the previous day's close, with an estimated volume of 820 million shares traded.

The U.S. stock market rose on the 28th. The Dow Jones Industrial Average closed up 273.17 points at 42,387.57, while the Nasdaq ended trading at 18,567.19, up 48.58 points. Concerns about escalating tensions in the Middle East eased as Israel's limited retaliation against Iran kept the situation in check, leading to an increase in stock prices after the opening. Expectations of strong earnings reports from major technology companies this week led to continued buying. The Nasdaq faltered towards the end due to rising long-term interest rates, but the market remained firm throughout the day.

Despite the rise in U.S. stocks, the Tokyo market started trading with profit-taking sales following the significant rebound of the previous day. The Nikkei average fell to the 38,400 yen range, but after the round of selling, large-cap stocks such as mega banks and financial stocks started to rise steadily, widening the gain. The Nikkei average turned around, ending the morning session above yesterday's high at 38,897.93 yen. However, trading in the prime market continued to focus on futures, with trading worth 1.8 trillion yen, indicating a lack of solid investment capital.

Among the Nikkei average constituent stocks, defense-related stocks such as IHI <7013>, Kawasaki Heavy Industries <7012>, and Mitsubishi Heavy Industries <7011> were bought, as well as financial stocks like Mitsubishi UFJ <8306>, Dai-ichi Life Holdings <8750>, Mizuho <8411>, and Sumitomo Mitsui <8316>. Other stocks like Furukawa Electric <5801>, M3 <2413>, Nitto Denko <6988>, Konica Minolta <4902>, Fujikura <5803>, and Astellas Pharma <4503> were also bought.

On the other hand, TOTO <5332> announced a significant decline in its final profit outlook due to a decline in its China business, leading to a sharp decline. Stocks related to China like Omron <6645>, Okuma <6103>, and Fanuc <6954> were also sold off. Otsuka Pharmaceutical <4519> sold off as a result of profit-taking after the significant gains of the previous day. Other stocks like Tokuyama <4043>, Kirin Holdings <2503>, Suzuki <7269>, and Takashimaya <8233> declined.

By industry sector, banks, securities and commodity futures trading, insurance, other financial services, and nonferrous metals all rose, while only the Glass & Ceramics, Metals, and Precision Instruments sectors declined.

The exchange rate is currently hovering around 152.90 yen per dollar, with a slight strengthening of the yen and weakening of the dollar from the morning. The Bank of Japan's Monetary Policy Meeting will begin tomorrow, with market consensus leaning towards keeping the policy status quo, and no significant statements expected from BOJ Governor Kuroda. The market anticipates that the BOJ shares the same sentiment of waiting to assess the post-House of Representatives election leadership and the U.S. presidential election results.

In the afternoon session, the Tokyo market saw a strong upward trend, with hopes of the Nikkei average recovering to the 39,000 yen range. The driving force behind yesterday and today's gains is considered to be the buying back of positions by sellers who are cautious about the election results. The recovery of the Nikkei average to the 39,000 yen range will likely depend on foreign investors in Europe liquidating their sell positions.

The dollar-yen is weak, following the decline in US interest rates.

In the morning of the 29th, the dollar-yen was weak on the Tokyo market, falling from 153.35 yen to 152.85 yen. With the decrease in the US 10-year bond yields, there was selling of dollars. Selling of dollars by domestic players intensified towards the closing price. On the other hand, the yen was supported by the firmness of the Nikkei Stock Average.

The trading range up to this point: dollar-yen 152.85 yen to 153.35 yen, euro-yen 165.34 yen to 165.79 yen, euro-dollar 1.0811 dollars to 1.0819 dollars.

Check stocks for the afternoon session

・Sailor Ad <2156>, Base Food <2936>, and 6 other stocks hit the daily limit up.

*Includes temporary stopper (indicated price)

・Top gainers include SoftBank G <9984> in first place, followed by Advantest <6857> in second place.

Economic indicators and remarks by important people

[Economic indicators]

・Japan's effective job-to-applicant ratio in September: 1.24 times (estimation: 1.23 times, August: 1.23 times)

・Japan's unemployment rate in September: 2.4% (estimation: 2.5%, August: 2.5%)

[Important Person's Remarks]

・Minister of Finance Kato

Pay further attention to the tension in the foreign exchange market trends, including speculative movements.

It is important for the exchange rate to move steadily reflecting the fundamentals.

In October, the government's monthly economic report will be released.

Not applicable.