In the afternoon of the 23rd, we want to focus on the following three points in trading.

The Nikkei Average rebounds, with buying dominant following the rise of US stocks.

The dollar-yen exchange rate shows signs of stabilizing, as US interest rates remain high.

The top contributor to the increase is ADVANTAGE <6857>, while the second is Recruit Holdings <6098>.

The Nikkei Average rebounds, with buying dominant following the rise of US stocks.

The Nikkei Average rebounded. It ended the morning trading up 341.69 yen at 39,043.59 yen (estimated Volume 0.9 billion 41.33 million shares).

Last week's US market saw the Dow increase by 498.02 dollars to 42,840.26 dollars, while the Nasdaq finished up 199.83 points at 19,572.60 points. Although some tech stocks faced Sell-offs initially causing a drop, they rose on the back of the November personal consumption expenditures (PCE) price index suggesting progress in curbing inflation. The Dow briefly rose over 800 dollars from the previous day, but 'triple witching' with the expiration dates of stock index futures, stock index options, and individual stock options led to selling for position adjustment, while the possibility of a government shutdown weighed on investor sentiment, and the market struggled in the afternoon.

In contrast to the rising US stock market indexes, trading started with a rebound at 39,040.72 yen, an increase of 338.82 yen from the previous weekend. Buying was slightly ahead due to the alignment with Chicago Futures. The signing of a bridging budget plan by US President Biden until mid-March seems to have alleviated concerns over the risk of government agency shutdown.

Individually, semiconductor-related stocks like DISCO <6146>, Tokyo Electron <8035>, and Advantest <6857>, as well as financial stocks like Mitsubishi UFJ <8306> and Mitsui Sumitomo <8316>, have maintained a strong performance. Additionally, Mitsubishi Heavy Industries <7011>, SOFTBANK GROUP CO <9984>, and Panasonic HD <6752> saw increases. Furthermore, iREX <9517>, which announced a capital and business partnership with JR East, surged, while Migaroholdings <5535>, Samco <6387>, and Yamashin Filter <6240> recorded high rates of increase.

On the other hand, Fujikura <5803>, Kioxia HD <285A>, KADOKAWA <9468>, NISSAN MOTOR CO <7201>, JT <2914>, and KEYENCE <6861> decreased. H.I.S. <9603>, which was viewed negatively for falling into a non-dividend situation in the fiscal year ending October 2024, and Japan Shinyaku <4516>, which was seen negatively due to the results of a U.S. lawsuit with Sarepta, plunged. Additionally, Musashi Seimitsu Industry <7220> and Akebono Foundation Brake <7238> were among the top decliners.

By sector, Electricity & Gas, Transportation Equipment, and Service industries rose, while Marine Transportation, Iron & Steel, and Air Transportation fell.

In the afternoon session, the Nikkei Stock Average is likely to continue with a heavy upward trend due to a lack of materials to actively buy up. After passing the last important event of the year with the Japan-US central bank meetings, the market is entering a quiet year-end mode. As many overseas Institutions begin Christmas holidays, the trading volume in the Main Board is expected to decrease, and the focus of the market will likely shift to individual investors. This month, the last trading day for acquiring entitlements for benefits and dividends is set for the 26th, which may heighten interest in companies with fiscal year-end in December. Expectations for a 'strong ending' could lead individual investors to focus on small and mid-cap stocks in the Standard and Growth markets, resulting in a market development centered around individual stocks.

The dollar-yen exchange rate is stabilizing as U.S. interest rates remain high.

In the Tokyo market on the morning of the 23rd, the dollar-yen rate fluctuated, falling from 156.69 to 156.32 before rebounding slightly. At the start of the week, profit-taking sales of the dollar led, but U.S. 10-year bond yields remained firm, creating a favorable environment for dollar buying. Moreover, the steady performance of the Nikkei stock average intensified yen selling.

The trading range so far has been as follows: dollar-yen from 156.32 to 156.69, euro-yen from 163.14 to 163.40, and euro-dollar from 1.0427 to 1.0445.

■ Stocks to check in the latter half.

・Veritas In Silico <130A>, Branzista <6176>, and three other stocks reached the limit up.

This includes the temporary limit high (response value).

The top contributor to the increase is ADVANTAGE <6857>, while the second is Recruit Holdings <6098>.

Economic indicators and remarks by important people

[Economic indicators]

・USA's November Core PCE Price Index: +2.8% year-on-year (Financial Estimates: +2.9%, October: +2.8%).

・USA's November Personal Income: +0.3% month-on-month (Financial Estimates: +0.4%, October: +0.6%).

・USA's November Personal Consumption Expenditures (PCE): +0.4% month-on-month (Financial Estimates: +0.5%, October: +0.4%).

Key Person Statements

- William's NY Federal Reserve President.

It is expected that next year's growth rate will slow down to about 2%.

It is strongly recognized that the interest rates are at a significantly restrained level.

< Domestic >

None

・16:00 UK GDP revision for July-September quarter (year-on-year estimate: +1.0%, preliminary figure: +1.0%)