In the afternoon trading on the 4th, the following three points should be noted.

・The Nikkei average fell for the third consecutive day, losing momentum due to concerns such as the situation in South Korea.

・The dollar-yen exchange rate struggled to rise, affected by the fall of Japanese stocks.

・The top contributors to the decline were SoftBank Group <9984>, followed by Shin-Etsu Chemical <4063>.

■The Nikkei average fell for the third consecutive day, losing momentum due to concerns such as the situation in South Korea

The Nikkei average fell for the first time in three days. It closed at 39,077.04 yen, down 171.82 yen (−0.44%) from the previous day, with an estimated volume of 0.9 billion 40 million shares.

The U.S. stock market on the third showed mixed results. The Dow average closed down $76.47 at $44,705.53, while the Nasdaq rose 76.96 points to close at 19,480.91. Adjustments continued ahead of the scheduled employment statistics announcement this week, resulting in a mixed opening. Although selling to close positions continued, keeping the Dow soft throughout the day, optimism about the economy strengthened after the JOLTS job openings reaffirmed the labor market's resilience, leading to a stabilization in the market and a reduction in the decline toward the end. The Nasdaq saw buying in mobile device companies such as Apple and online retailers like Amazon, which pushed the index higher and expanded its gains to set a new record for consecutive days. The market ended mixed.

The U.S. stocks were mixed, but following the trend of rising tech stocks, the Tokyo market opened with more buyers. After the opening, the Nikkei average rose; however, due to concerns regarding the situation in South Korea, it lost momentum just before yesterday's high of 39,427.37 yen, gradually narrowing its gains and drifting into negative territory compared to the previous day. Nonetheless, with continued buying of defense-related stocks such as Mitsubishi Heavy Industries <7011> and IHI <7013>, large caps remained strong, preventing a drop below 39,000 yen.

In the Nikkei average components, JR East <9020>, which is reported to soon apply for a fare increase on the Yamanote Line, fell, along with Keisei Electric Railway <9009> and Odakyu Electric Railway <9007>, both of which performed poorly. Additionally, due to concerns over the strong yen, automotive stocks such as Subaru <7270>, Nissan Motor <7201>, and Honda <7267> also weakened. Other declining stocks included Eisai <4523>, Nikon <7731>, DOWA Holdings <5714>, Otsuka Holdings <4578>, and SoftBank Group <9984>.

On the other hand, in addition to Mitsubishi Heavy Industries and IHI, defense-related stocks such as Japan Steel Works <5631> and Kawasaki Heavy Industries <7012> were also bought. Additionally, stocks benefiting from the strong yen such as Ryohin Keikaku <7453>, ZOZO <3092>, Nitori Holdings <9843>, and Sapporo Holdings <2501> saw buying. Other stocks that rose include Fujikura <5803>, sony group corp <6758>, Resonac <4004>, DeNA <2432>, and Nintendo <7974>.

By sector, electricity and gas, metal products, land transportation, marine shipping, iron & steel, etc., fell, while only five sectors, including other products, retail, warehouse & transportation, petroleum & coal, and machinery, rose.

In response to the sudden change in the situation in South Korea, risk aversion led to a yen buying trend in the foreign exchange market, and the yield on 10-year government bonds also temporarily dropped to 1.065%. The afternoon session of the Tokyo market is expected to see a volatile trend due to the uncertain South Korean situation, with the Nikkei average likely to fall below 39,000 yen.

The dollar-yen is struggling to rise, due to the decline of Japanese stocks.

In the morning of the 4th, at the Tokyo market, the dollar-yen struggled to rise, increasing from 149.52 yen to 150.07 yen, then falling back to the 149 yen range. The rise in US 10-year bond yields led to buying of the dollar, temporarily reaching the 150 yen level. However, with the widening decline in the Nikkei average stock price, sentiment shifted towards buying the yen, pushing the dollar down.

The trading ranges so far are as follows: Dollar-yen from 149.52 yen to 150.07 yen, Euro-yen from 157.16 yen to 157.52 yen, Euro-dollar from 1.0497 dollars to 1.0512 dollars.

Check stocks for the afternoon session

THECOO <4255>, BTM <5247>, etc., 5 stocks hit the daily limit.

*Includes temporary stopper (indicated price)

・The top contributors to the decline were SoftBank Group <9984>, followed by Shin-Etsu Chemical <4063>.

Economic indicators and remarks by important people

[Economic indicators]

Australia: GDP for July-September quarter: +0.8% year-on-year (forecast: +1.1%, April-June quarter: +1.0%).

China: November Caixin Services PMI: 51.5 (forecast: 52.4, October: 52.0).

[Important Person's Remarks]

South Korea Ministry of Finance

"Confusion surrounding martial law, prepared to inject unlimited liquidity into the market if necessary"

Nothing special

Nothing special