Tokyo Market Summary: Will stock prices due to a slight rebound in the Nikkei Average and the Buffett effect of rising trading company stocks until early July

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●The Nikkei Average ended at 33388.91 yen, 18.49 yen higher than the previous business day
● Abolition of quarterly financial results reports, postponement of law revisions in the current Diet session
● Will trading company stocks go backwards and the Buffett effect will last until early July
● Chairman Nidec Nagamori sees M&A on a scale of 1 trillion yen - to target sales of 10 trillion yen
● The yen's trade-weighted average index reached a low level for the first time in 20 years, and the domestic and foreign policy gap widened
● The purchase of ultra-long-term bonds by Japanese trust banks reached a record high due to the influence of the pigeon-like Bank of Japan
● Notable stocks: $Mitsubishi(8058.JP)$、 $ITOCHU(8001.JP)$、 $Nidec(6594.JP)$etc
-Moomoo News Japan Stocks

Market Overview
The Nikkei Stock Average ended at 33388.91 yen, 18.49 yen higher than the previous business day in the Tokyo stock market today, and the TSE stock price index (TOPIX) fell 6.65 points to 2283.85.

Top news
The purchase of ultra-long-term bonds by Japanese trust banks reached a record high due to the influence of the dovish Bank of Japan
While speculation that the Bank of Japan will revise its yield curve control (long and short interest rate manipulation, YCC) policy recedes, the purchase amount of ultra-long-term government bonds by Japanese trust banks reached a record high in May.

The yen's trade-weighted average index reached a low level for the first time in 20 years, and the domestic and foreign policy gap widened
As the depreciation of the yen accelerates, the yen index, which is the trade-weighted average, has fallen to a low level for the first time in over 20 years. The index showing the strength of the yen against trading partner countries calculated by Deutsche Bank closed on the 19th at the lowest level since 2000, when data can be traced back. The yen was once again caught in the widening gap between the Bank of Japan's ultra-monetary easing policy and the hawkish stance of Western central banks.

Japan's exchange intervention did not become easy and was not subject to US surveillance
In response to the depreciation of the yen, while awareness of the possibility of yen buying intervention by the Japanese currency authorities began to be recognized, the US Treasury Department announced on the 16th that Japan would be removed from the list of monitoring targets related to exchange rate policy. There is also an interpretation that it has become easier for Japan to intervene, but it doesn't seem that simple. Rather, it is pointed out that it has become difficult to obtain the understanding of the US side compared to 2022/9-10, when the intervention was carried out.

Bank of Japan revised “uncertainty” repeatedly by Governor Ueda, pressure on yen depreciation and higher overseas interest rates
Corrective observations of large-scale monetary easing by the Bank of Japan have receded in financial and capital markets. This is because President Kazuo Ueda repeatedly insisted that “uncertainty is high” about the future of prices. It is currently difficult to predict whether the positive range of the consumer price index (CPI) shrinks until the middle of this fiscal year and then accelerates again. Therefore, there is a growing view in the market that the Bank of Japan will also continue to take a cautious stance on early policy revisions.

Electricity Cartel, Minister of Economy, Trade and Industry Nishimura “Strictly Addressed”
Minister of Economy, Trade and Industry Yasutoshi Nishimura stated at the press conference after the cabinet meeting on the 20th that “it is extremely regrettable that there is a risk that it will greatly interfere with the healthy development of the electricity business” regarding cartel issues such as electricity sales to enterprises of major power companies. In response to recommendations from the Electricity and Gas Transaction Monitoring Committee of the Ministry of Economy, Trade, and Industry, it was emphasized that “I want to deal with it strictly.”

Export ship contracts fell 57.5% in May, orders did not grow due to high steel prices
The export ship contract results (order volume) for May announced by the Japan Ship Exporters Association (Tokyo/Port) on the 20th were 490,000 gross tons, down 57.5% from the same month last year. It has been 3 consecutive months since it fell below the same month last year. Steel prices remained high, ship prices were rising, and shipowners were cautious about placing orders had an impact.

Abolition of quarterly financial results reports, postponement of law revisions in the current Diet session
On the 20th, the government/ruling party forfeited the enactment of the current Diet with 2 bills submitted by the cabinet, such as the Financial Instruments and Exchange Law amendment plan incorporating the abolition of quarterly reports. It is expected that continuing deliberation procedures will be applied at the House of Councillors plenary session on the 21st. It was affected by delays in enactment of the bill that the ruling opposition party confronted.

Foreign investment and loans of Japanese banks increased for 2 consecutive terms to 4.7 trillion dollars at the end of March
According to Bank of International Settlements (BIS) statistics announced by the Bank of Japan on the 20th, the international credit balance (final risk basis) of Japanese banks at the end of March increased to 4,775.2 billion dollars (about 678 trillion yen) for the second consecutive term. There was a trend of increasing investment in US bonds in anticipation of a decline in US interest rates.

Notable stocks
Will trading company stocks go backwards and the Buffett effect will last until early July
As the Nikkei Average continued to fall in the Tokyo Stock Market on the 20th, the reverse rise in trading company stocks was conspicuous. $Mitsubishi(8058.JP)$Ya $ITOCHU(8001.JP)$Shares of the five major trading companies, etc., have all updated their prices since listing. $Sumitomo(8053.JP)$has recovered 1 times PBR (stock price/net asset ratio). An increase in trading company stock buybacks of the US investment company Berkshire Hathaway led by famous investor Warren Buffett is a clue, but cautious views on the sustainability of stock prices due to the “Buffett effect” have also begun to appear in the market.

At the Nidec general meeting, Mr. Nagamori says flying cars are “one for every family”
$Nidec(6594.JP)$On the 20th, Chairman and Chief Executive Officer (CEO) Nagamori Shigenobu (CEO) expressed the idea at the 2023 Annual General Meeting of Shareholders that the next president, who is seen as a successor, will be required to “raise stock prices.” “Flying Cars,” which announced their entry into the motor parts business on the 18th, predicted that an era where “everyone will have one car at a time in the future” would come.

Chairman Nidec Nagamori sees M&A on a scale of 1 trillion yen - to target sales of 10 trillion yen
$Nidec(6594.JP)$Chairman and Chief Executive Officer (CEO) Nagamori Shigenobu (CEO) of said on the 20th that large-scale mergers and acquisitions (M&A) of companies will also be examined in the future, and “in some cases, companies on a scale of about 1 trillion yen will be acquired.”

Sony G President Toki says financial business “continues cooperation even after separation”
$Sony Group(6758.JP)$On the morning of the 20th, an ordinary general meeting of shareholders was held in Minato Ward, Tokyo. Regarding the financial business company Sony Financial Group (FG), which announced the separation policy at the management policy briefing session in May, President Hiroki Toki stated “we will continue and strengthen cooperation as a group even after separation.”

Supporting Kyoto's weavers with AI designs for Nishijin textile spun by Sony
$Sony Group(6758.JP)$has begun an initiative to support Kyoto's traditional high-grade textile “Nishijin textile” using artificial intelligence. Complex designs are created with AI to save time and money. Cooperate with local companies, etc., and establish a sustainable system as an industry even if the market shrinks. The Japanese manufacturing industry, not limited to traditional crafts, has many small and medium-sized enterprises suffering from technology succession and labor shortages, and there is a possibility that it will be a model case for solving issues with AI.

Subaru to install driver assistance systems for manual cars
$Subaru(7270.JP)$On the 20th, it was announced that the driver assistance system “EyeSight” for manual cars will be developed and mounted on the “BRZ” improved model scheduled to be announced this fall. Until now, it has been used in automatic cars, and this is the first time that a manual car has been installed. The aim is to enhance safety functions such as collision avoidance even in manual cars.