■Interest rate increases are feared and the upper value of the Nikkei Average is heavy

This week's Nikkei Average fell by 158.21 yen (-0.41%) to 38487.90 yen per week. The yield on new 10-year government bonds, which is an indicator of long-term interest rates, rose to 1.100%, etc., and while awareness of early normalization of monetary policy by the Bank of Japan was recognized, aggressive purchases were refrained and there was little sense of direction. Long-term interest rates have risen not only in Japan, but also in the United States, and 10-year government bond yields have risen to 4.6% for the first time in about a month. The NY Dow was also affected by the sharp drop in constituent stocks such as Salesforce, etc., and temporarily fell by about 5% in about 2 weeks from the all-time high price of 40003.59 dollars based on the closing price set on 5/20. The fall in US stocks weighed on Japanese stocks. On the weekend, it was reported that “the government will actively use public money on a scale of 100 trillion yen, such as civil servant pensions, etc.,” etc., and it rose as material, but when the value returned to the 25th moving average level, the upper price became heavy.

The prime market trading price recorded 7.7 trillion yen on 5/31, when the rebalance associated with the MSCI regular review was 7.7 trillion yen, the largest trading price since the 2022/4 market classification review, but sales declined until late May, and there were many days where it remained in the 3 trillion yen range.

Note, according to trading trends by investor for 5/4 (5/20-24), foreign investors oversold actual goods by 101.7 billion yen, overbought TOPIX futures by 113.7 billion yen, and overbought 225 futures by 31.6 billion yen, resulting in a total overpurchase of 43.6 billion yen. Meanwhile, individual investors oversold 21.9 billion yen in total, such as overbuying actual goods by 71.5 billion yen. Furthermore, the trust slightly oversold the actual product to 10.8 billion yen.

■Is it difficult to get a sense of direction until the Japan-US central bank meeting in June

The US stock market on May 31 was mixed. The Dow average closed at 38686.32 dollars, which was 574.84 dollars higher (+1.51%) than the previous day, the NASDAQ was 2.06 points lower (-0.01%) at 16735.02, and the S&P 500 closed at 5277.51, which was 42.03 points higher (+ 0.80%). Nikkei 225 futures in the Taisen Night Session closed at 38730 yen, which was 240 yen higher than the regular closing price.

In response to rising interest rates, regional bank stocks such as Fukuoka FG ＜8354＞, Kyushu FG ＜7180＞, and Resona HD ＜8308＞, and insurance stocks such as Dai-ichi Life HD ＜8750＞ are doing well. There are also industries that are rising by sector, but when viewed in the Tokyo market as a whole, rising interest rates are a factor that makes people refrain from buying. If the situation was strong in February-March, the rise in interest rates may have been positively perceived as “de-deflation,” and large stocks may have been bought, but under circumstances where investor sentiment has deteriorated, it seems that negative perceptions of refraining from buying other than related sectors are taking precedence. At the Bank of Japan monetary policy meeting to be held on 6/13-14, attention is being paid to the presence or absence of statements on gradual cuts in government bond purchases and additional interest rate hikes. Since the US Federal Open Market Committee (FOMC) will also be held on 11-12, which is just before the Bank of Japan meeting, there is a possibility that the situation with little sense of direction will continue until the Japan-US central bank meeting passes in mid-June.

■NT ratio is the lowest level this year

On the daily chart, the value returned to the 38480 yen level where the 25-day moving average is located, but it dropped from the 75-day moving average 38940 yen level, which functioned as a lower price support line for about a month from late April. The average trading price (in terms of 1 business day) of the Prime Market in May was 4.55 trillion yen. February was 5.16 trillion yen, March was 5.12 trillion yen, and April was 4.45 trillion yen, but there is a downward trend compared to February-March. There is a tendency for trading prices to peak ahead of stock prices, but since the Nikkei Average applied an all-time high of 40888.43 yen based on the closing price on March 22, this time is also in line with theory.

Meanwhile, TOPIX is moving above the 25-day moving average. Unlike the Nikkei Average, TOPIX is moving higher on the 25-day moving average than the 75-day moving average, so it can be said that TOPIX has a stronger chart shape. While bank stocks and insurance stocks with large market capitalization are rising in response to rising interest rates, there aren't even semiconductor stocks with values such as Tokyo Electron ＜8035＞ and Advantest ＜6857＞, so the NT ratio is 13.88 times the lowest level this year. TOPIX is less than 2% until the year-to-date high of 2813.22 points based on the closing price on March 22. If the position of TOPIX dominance continues until the Japan-US central bank meeting in mid-June, there is a possibility that TOPIX will update its year-to-date high.

■ECB Board Meeting on the 6th, US Employment Statistics on the 7th

Next week, domestically, capital investments for the fiscal year ending 1-3 months are scheduled for the 3rd, the May monetary base on the 4th, April monthly labor statistics on the 5th, and the April business trend index (preliminary figures) on the 7th.

Overseas, China and May Caixin Manufacturing Purchasing Managers Business Index (PMI), US Europe, Germany, UK, France, May Manufacturing PMI (revised value), US · May ISM Manufacturing Business Index, US · April 4 JOLTS job offers, manufacturing new orders, durable goods orders (confirmed value), Australia · January 5 gross domestic product (GDP) for the fiscal year ending 1-3 months on the 5th, China May ADP Service Industry/Comprehensive PMI, US · May ADP US Employment Report, Service Industry/Comprehensive PMI (revised value), ISM Non-manufacturing business index, weekly crude oil Inventory, the Europe/European Central Bank (ECB) announced policy interest rates on the 6th, the number of new US-weekly unemployment insurance claims, April trade balance, the 7th, the Mid-May trade balance, Europe/1-3 Eurozone GDP (final value), the US-5 employment statistics, April wholesale inventory (confirmed value), etc. are scheduled.