With Mr. Trump's victory, the yen depreciated and stocks rose.

This week, the Nikkei average rose by 1446.70 yen (+3.80%) to 39500.37 yen for the week. In the highly anticipated U.S. presidential election, Mr. Trump's lead was reported shortly after the polls opened, causing U.S. 10-year bond yields to rise in after-hours trading on the 6th, and the yen to depreciate and the dollar to rise in the foreign exchange market. Defense-related companies like Mitsubishi Heavy Industries <7011> and Kawasaki Heavy Industries <7012> rose, and IHI <7013> hit the daily limit during trading hours due to a strong earnings report announcement. As the exchange rate fluctuated to around 154 yen to the dollar in the foreign exchange market, the Nikkei average on the 6th increased significantly by over 1000 yen compared to the previous day. Following Mr. Trump's victory declaration, U.S. markets, including the Dow, Nasdaq, and S&P500, all hit record highs, and the Nikkei average on the 7th approached 40,000 yen.

Over the weekend, the first round of Trump trade and the fluctuation of Fujikura <5803> chilled investor sentiment, weighing on the upside of the Nikkei average. However, there was active trading in earnings report stocks, influenced by extended trading hours, and the trading value in the prime market on the 7th exceeded 6 trillion yen. The November contract options SQ (special settlement index) calculated over the weekend was 39,901.35 yen. It became a 'phantom SQ value' as it never hit during trading hours.

According to the buying and selling trends of principal investors in the fifth week of October, foreign investors sold 210.6 billion yen of actual stocks, bought 158.5 billion yen more TOPIX futures, and sold 278 billion yen of 225 futures, resulting in a total net selling of 330.1 billion yen. On the other hand, individual investors sold 40.8 billion yen of actual stocks and bought a total of 20.2 billion yen more. Trusts bought 174.8 billion yen in actual stocks.

Earnings reports will peak next week.

The U.S. stock market rose on the 8th. The Dow Jones average closed at 43,988.99, up 259.65 points from the previous day, while the Nasdaq closed at 19,286.78, up 17.32 points, both reaching record highs. The night session of the Osaka Exchange's Nikkei 225 futures closed at 39,140 yen, down 360 yen from the daytime closing price.

The Nikkei average this week struggled near the 40,000 yen mark. Next week, a special session of parliament will be held from the 11th to designate a new prime minister. It is expected that the Suga administration will continue, while the Liberal Democratic Party and Komeito are exploring a partial coalition with the National Democratic Party, but many believe that stable governance will be difficult. Due to concerns about political instability, it is unlikely that foreign investors will actively buy.

Next week, with around 1,400 companies set to announce earnings, the standoff feeling in the indexes will increase, leading to a market focused on individual stock picking. The increase in trading hours had a significant impact, with stocks announcing earnings at 3 p.m. being actively traded based on earnings, leading to a growing trend in the prime market's trading value. Expect active trading based on earnings announcements next week as well.

With the acceleration of the weak yen, the speculation of a rate hike at the Bank of Japan meeting in December is increasing.

In the foreign exchange market, the yen weakened and the dollar strengthened to the 154 yen level in response to the acceleration of the weak yen. As a result, additional rate hike speculation is growing for the Bank of Japan's monetary policy decision meeting in December. It is considered unlikely that the Bank of Japan will implement additional rate hikes to suppress the weak yen, but with positive remarks from Bank of Japan Governor Kuroda after the Bank of Japan meeting on October 31st, the possibility seems non-zero. In fact, the yen's strength to the 154.70 yen level due to Trump's trade policies has subsided around the time speculation about the Bank of Japan meeting was reported.

The Dollar Index also rose to the 105.3 level, the highest since early July, but as the Federal Open Market Committee (FOMC) implemented a 0.25% interest rate cut as expected by the market, and Federal Reserve Chairman Powell indicated a continuation of rate cuts, the Dollar buying related to a Trump victory temporarily paused. If the tailwind of the weak yen and strong dollar stops, it could weigh on export-related stocks.

On the 13th, the US CPI for October will be announced.

Next week domestically, the scheduled releases include the September Balance of Payments on the 11th, October Economy Watchers Survey on the 10th, October Money Stock M2 on the 12th, October Domestic Corporate Price Index on the 13th, Preliminary Real GDP for the third quarter on the 15th, and September Industrial Production (final data).

Internationally, scheduled releases include New Zealand's 4th Quarter 2-Year Inflation Expectations on the 11th, Australia's October NAB Business Confidence on the 12th, Germany's October Consumer Price Index (final data), Turkey's September Current Account balance, UK's September ILO Unemployment Rate, October Employment Statistics, Germany's November ZEW Economic Sentiment Index, South Africa's September Manufacturing Production, Australia's 3rd Quarter Wage Index on the 13th, Eurozone's September Industrial Production Index, US's October Consumer Price Index on the 14th, Australia's October Employment Statistics, Eurozone's 3rd Quarter Real GDP (revised data), US's October Producer Price Index, Weekly Initial Jobless Claims, Weekly Crude Oil Inventories on the 15th, China's October Industrial Production Index, Retail Sales, New Home Sales Prices, UK's September Monthly GDP, Industrial Production, Manufacturing Output, Trade Balance, 3rd Quarter Real GDP (preliminary data), US's November NY Fed Manufacturing Business Conditions Index, October Retail Sales, Industrial Production Index, etc.