In the afternoon trading on the 18th, attention should be paid to the following three points.

・The Nikkei index has declined for four consecutive days, showing a lack of direction ahead of the Japan-U.S. central bank meetings.

・The dollar-yen exchange rate is slightly firm, and U.S. interest rates have paused.

・The top contributor to the decline is SOFTBANK GROUP CO <9984>, with the second being Fast Retailing <9983>.

■The Nikkei index has declined for four consecutive days, showing a lack of direction ahead of the Japan-U.S. central bank meetings.

The Nikkei average has fallen for four consecutive days, ending the morning trading session at 39,281.06 yen, down by 83.62 yen (-0.21%) compared to the previous day (estimated Volume of 1.1 billion 60 million shares).

On the 17th, the US stock market declined. The Dow average ended down 267.58 dollars at 43,449.90 dollars, and the Nasdaq closed down 64.83 points at 20,109.06. Due to the persistently high long-term interest rates, the market dropped after the opening. Although the retail revenue in November that was announced in the morning exceeded market expectations, and the view that the Federal Reserve (FRB) would lower interest rates at the Federal Open Market Committee (FOMC) has not changed, it led to an observation that the pace of interest rate cuts next year may slow down. The uncertainty in monetary policy before the FOMC weighed on the market, with both the Dow and Nasdaq remaining soft throughout the day.

In response to the decline in US stocks, the Tokyo market started with a selling bias. After starting around 39,100 yen, the Nikkei average narrowed its decline and there were even moments of a comeback. With active trading being restrained ahead of the Japan-US central bank meetings, the index movements remained small. The market continues to be in a wait-and-see state.

Among the Nikkei listed stocks, Nissan Motor Co <7201> briefly hit the upper limit as reports emerged about entering discussions for a management integration with Honda <7267>. Mitsubishi Motors <7211>, of which Nissan is the largest shareholder, also saw significant gains, but Honda experienced a selling bias. This news acted as a catalyst, with MAZDA MOTOR CRP <7261>, Hino Motors <7205>, SUBARU CORP Unsponsored ADR <7270>, Toyota Motor <7203>, and Suzuki <7269> generally rising among automobile-related stocks. Auto parts companies like JTEKT <6473> also saw buying. Additionally, Disco <6146>, Taiyo Yuden <6976>, and Ebara Corporation <6361> were also bought.

On the other hand, SOFTBANK GROUP CO <9984>, which was bought yesterday, fell back, and segments related to entertainment such as Sony Group Corp <6758>, NINTENDO CO LTD <7974>, and Bandai Namco HD <7832> also saw declines. In addition, Sumitomo Pharma <4506>, Alps Alpine <6770>, Nitto Denko <6988>, and Casio <6952> also fell.

By sector, Other Products, Information & Communications, Pulp & Paper, Fisheries & Agriculture declined, while Transportation Equipment, Electricity & Gas, Mining, Securities & Commodity Futures, and Petroleum & Coal Products rose.

With the FOMC and the announcement of the Bank of Japan's monetary policy meeting results scheduled for tomorrow, the Tokyo market is likely to continue its modest movement in the afternoon session as well. Given that the Nikkei average is showing steady price movements, a drop below 39,000 yen is expected to be avoided. While there is pressure on the upside, a steady market is expected to persist in the afternoon.

The dollar-yen is slightly firm, and the recent decline in U.S. interest rates has paused.

In the Tokyo market on the morning of the 18th, the dollar-yen moved slightly higher, rising from 153.40 yen to 153.78 yen. The U.S. 10-year bond yield, which decreased in the overseas market the previous day, has remained steady, leading to some demand for the dollar. Additionally, the rise in Chinese and Hong Kong stocks led to a retreat in yen buying, supporting the dollar.

The trading range so far has been: dollar-yen from 153.40 yen to 153.78 yen, euro-yen from 160.96 yen to 161.48 yen, and euro-dollar from 1.0492 dollars to 1.0503 dollars.

■ Stocks to check in the latter half.

・Yume Tenbo <3185>, Ubiquitous AI <3858> and 6 other stocks reached the daily limit up.

This includes the temporary limit high (response value).

・The top contributor to the decline is SOFTBANK GROUP CO <9984>, with the second being Fast Retailing <9983>.

Economic indicators and remarks by important people

[Economic indicators]

・Japan's November trade balance: -117.6 billion yen (Financial Estimates: -687.9 billion yen, October: -462.1 billion yen).

Key Person Statements

・Hamas.

"The release of hostages and the ceasefire agreement can be established without new conditions."

< Domestic >

・Bank of Japan Monetary Policy Meeting (until 19th)

・16:00 UK November Consumer Price Index (year-on-year forecast: +2.6%, October: +2.3%)

・16:00 UK November Producer Price Index - Output (year-on-year forecast: -0.6%, October: -0.8%)