The market capitalization of the Prime market reached an all-time high of 1,000 trillion yen.
This week, the Nikkei average rose 1329.29 yen (+3.36%) to 40,912.37 yen, continuing to rise as financial stocks such as insurance and banks were bought, and precision instruments were also sought after. The Nikkei average and TOPIX both expanded their gains and set new record highs. Product structure, 10-30 billion-yen products had operating incomes of 401/1288/60 million yen, respectively.
Against the background of expectations for the Bank of Japan's monetary policy decision meeting, which will be held on July 30-31, the indicator of long-term interest rates, the newly issued 10-year government bond yield, rose to 1.100%. Mitsubishi UFJ Financial Group, which has a large market capitalization, became the top seller in the entire market transaction value. In addition, some securities firms issued positive reports and the rise of Apple in the United States became a stimulus, causing electronic equipment related companies which were not much purchased from January to March, such as TDK and Murata Manufacturing to rise. Although the transaction value of the Prime Market is about 4 trillion yen and trading is not expanding much, buying, which is considered to be intermittent buybacks in the futures market, has also been observed, causing both the Nikkei average and TOPIX to set new record highs on July 4th. At the same time, the market capitalization of the Prime market exceeded 1,000 trillion yen for the first time in history.
According to the investment trend of the fourth week of June, foreign investors overbought spot by 114.1 billion yen and overbought TOPIX futures by 178.7 billion yen, and overbought 225 futures by 92.2 billion yen, resulting in a total overbought of 385 billion yen. On the other hand, individual investors sold 472.2 billion yen of spot and sold a total of 539.5 billion yen. Meanwhile, self-ownership overbought spot by 414.1 billion yen.
Psychological market may also be overheated.
On July 5th, the U.S. stock market rose. The Dow Jones rose 67.87 dollars (+0.17%) to 39,375.87 dollars, the Nasdaq rose 164.46 points (+0.90%) to 18,352.76, and the S&P500 rose 30.17 points (+0.54%) to 5,567.19 at the close of trading. The Nikkei 225 futures, which was trading on the night session of the Tokyo Stock Exchange, ended trading at 41,010 yen, which is 150 yen higher than the previous day's closing price for normal trading.
On a daily basis, the Nikkei average has an upward deviation rate of 4.4% from the 25-day moving average line and 13.1% from the 200-day moving average line, with short-term overheating being scarce compared to the "25-day moving average line + 7% deviation" or "200-day moving average line + 20% deviation" seen from March to April. Individual stocks such as Mitsubishi Heavy Industries, which has risen for 10 consecutive days, are also notable, but the index is in a market where there is "the highest level without enthusiasm." As of July 4th, the psychological line (ratio of up and down movements in 12 business days) had risen to the level of being too bought, at 83% (10 wins and 2 losses), and as a result, it fell slightly on the previous day, but it can be attributed to natural adjustment as the announcement of the June U.S. employment statistics and the second French National Assembly elections are approaching. The sentiment of investors is good, as cyclical stocks such as marine transport stocks, financial stocks, precision machinery stocks, and semiconductor stocks are being bought one after another.
With the increase in the announcement of the first quarter performance of fiscal year ending march 2022 of companies in late July, there is a possibility that main stocks will be bought on the basis of expectations for the earnings results in the future. At the timing of the announcement of the first quarter earnings, I don't think that many companies will revise their earnings forecast upward early, but if foreign investors who have seen the "record high update of TOPIX" aggressively invest in Japanese stocks, there is a possibility that both the Nikkei Average and TOPIX will pursue the upside.
ETF selling is a psychological burden.
In the market, sales of listed exchange-traded funds (ETFs) are being watched out for as next week's earnings day approaches. It is estimated that there will be selling in order to generate distribution to investors, totaling around 1 to 1.3 trillion yen for both physical and futures stocks, according to calculations by securities companies. This is a topic that comes up every year at this time, so it is already factored in and the impact is limited. However, the annual high of the Nikkei average last year was on July 3 (33,753.33 yen), so it is a concern for investor psychology. Due to the negative events in supply and demand, active trading may be withheld and there is a possibility that the Tokyo market next week will be in a wait-and-see mood. It is assumed that there will be a small adjustment to cool down the overheated feeling towards the current upward trend, including individual stocks.
Note that the exchange rates are at the 160 yen to one dollar level. The observation of the Japanese government and the Bank of Japan's yen buying intervention is still strong, but the view is strong that it is difficult to implement a yen buying intervention as a rapid decline in the yen and an increase in the dollar is not progressing. From about two to three weeks before the Bank of Japan meeting, information from Bank of Japan officials begins to be disseminated, and attention will be paid to the trends in the foreign exchange and interest rate markets surrounding the Bank of Japan meeting leak information.
On the 11th, US CPI and on the 12th, US PPI.
Next week, in Japan, the May balance of payments on the 8th, the June Economic Watcher Survey on the 6th, the June domestic corporate goods price index on the 10th, the May machinery orders on the 11th, and the May industrial production of mining and manufacturing will be announced on the 12th.
Overseas, on the 9th, the Australian July Westpac Consumer Confidence Index, on the 10th, the Chinese June Producer Price Index (PPI) and Consumer Price Index (CPI), the New Zealand Reserve Bank (central bank) policy interest rate announcement, the Turkish May industrial production index, US May wholesale inventory, weekly crude oil inventory, on the 11th, the German June PPI, CPI (revision value), UK May mining and manufacturing production index, trade balance, US June CPI, weekly new unemployment insurance claims, and on the 12th, the German May retail sales, Chinese June trade balance, US June PPI, and the preliminary value of the July University of Michigan Consumer Confidence Index are scheduled to be announced.