In the afternoon trading on the 31st, attention should be paid to the following three points.

・The Nikkei Average falls for the first time in 4 days, as the Bank of Japan meeting approaches, a cautious mood intensifies.

・The dollar-yen struggles to rise, with some yen buying due to the Bank of Japan's policy.

・The top contributor to the decline is Fast Retailing <9983>, with Kyocera <6971> in second place.

■The Nikkei Average falls for the first time in 4 days as the Bank of Japan meeting approaches, intensifying a cautious mood.

The Nikkei average fell for the fourth consecutive day, closing the morning session at 39,116.79 yen, down 160.60 yen (-0.41%) from the previous day, with an estimated volume of 907 million shares.

The U.S. stock market fell on the 30th. The Dow Jones fell by 91.51 points to 42,141.54, while the Nasdaq closed at 18,607.93, down by 104.82 points. The decline was influenced by the drop in heavy equipment maker Caterpillar's stock, affecting the Dow. Trading opened mixed after the morning session as private sector employment statistics exceeded expectations, and GDP growth for the July-September quarter showed consistent growth despite slowing from the previous quarter, leading to an increase in market sentiment on hopes for a soft landing. However, concerns over rising long-term interest rates and weakness in the semiconductor sector suppressed gains, leading to a downturn towards the end.

Reacting to the drop in U.S. stocks and profit-taking after a 3-day rally, the Tokyo market started with a dominant selling trend. The Nikkei average remained in negative territory throughout the day but with a focus on earnings reports, there was no observable movement that would deteriorate the index. With upcoming events like the Bank of Japan's policy decision meeting and BOJ Governor Kuroda's press conference at 3:30 pm, a cautious mood prevailed.

Among the Nikkei constituent stocks, companies like Kyocera Corporation sponsored ADR, Nomura Research Institute, Hitachi, M3, CyberAgent, Alps Alpine, as well as Renesas Electronics, Screen Holdings, Socionext, and TDK showed declines. In the semiconductor sector, there was general weakness.

On the other hand, Mitsubishi Motors gained significantly due to better-than-expected earnings, while Advantest, which announced a substantial upward revision of its full-year performance outlook and a share buyback plan, also saw buying interest. Despite Dai Nippon Printing lowering its net profit forecast for the current period, the announcement of a sizable 9.62% share buyback helped support its stock. Additionally, companies like Keyence, Nichirei, Shin-Etsu Chemical, Olympus, and Lasertec showed strong performance.

In terms of global sectors, pulp & paper, electric appliances, iron & steel, information & communications, and food products experienced declines, while metals, rubbers, land transportation, precision instruments, and services showed gains.

As of 11:40 am, the outcome of the Bank of Japan's meeting has not been announced yet, but if it maintains the status quo in its monetary policy as expected, the impact on the currency, stock, and bond markets is expected to be limited. The afternoon session in Tokyo is likely to remain subdued with focus shifting to earnings announcements to be released during trading hours. Scheduled earnings releases include companies like Kawata, Sumitomo Riko, NYK Line, KEPCO, Otsuka Holdings, Tokyo Steel, Nippon Steel, Hoya, Eslite, Sanyo, Chugai Ro, Toyota Boshoku, Toyoda Gosei, Sagami Railway, among others.

The dollar-yen struggles, with a slight yen buying trend due to the Bank of Japan's policy.

In the morning of the 31st, the dollar-yen struggled in the Tokyo market, rising from 153.16 yen to 153.62 yen before slightly losing momentum. The Bank of Japan decided to keep the current policy interest rate at its monetary policy meeting. However, they maintain the policy of financial normalization, leading to a somewhat yen-buying tendency after the policy decision.

The trading ranges so far are as follows: the dollar-yen ranges from 153.16 yen to 153.62 yen, the euro-yen ranges from 166.21 yen to 166.68 yen, and the euro-dollar ranges from 1.0844 dollars to 1.0859 dollars.

Check stocks for the afternoon session

・Sapeet <269A>, Beautyka Holdings <3041>, among others, saw 4 stocks hit the daily limit high.

*Includes temporary stopper (indicated price)

・Top contributors to the decline were First Retail <9983>, followed by Kyocera <6971> in second place.

Economic indicators and remarks by important people

[Economic indicators]

・Japan: Industrial production in September: +1.4% month-on-month (forecast: +0.8%, August: -3.3%).

・Australia: Retail sales revenue in September: +0.1% month-on-month (forecast: +0.3%, August: +0.7%).

・China: Manufacturing PMI in October: 50.1 (forecast: 49.9, September: 49.8).

• China • October non-manufacturing PMI: 50.2 (Estimate: 50.3, September: 50.0)

[Important Person's Remarks]

• Bank of Japan

"Continue to raise the policy interest rate and adjust the degree of easing"

"The current real interest rate is at an extremely low level"

"Uncertainty regarding the economy and prices remains high"

"Activation of wage and price-setting behaviors, with exchange rate fluctuations having a more pronounced impact"

"Maintaining the outlook for the core consumer price index (CPI) for 2024 at +2.5%"

- Jens Weidmann, President of the Deutsche Bundesbank.

Price stability is not far off, but we must achieve the last part.

Bank of Japan concludes its financial policy meeting.

- 3:30 pm: Mr. Ueda, Governor of the Bank of Japan, will hold a press conference.

Not applicable.