■Stock Market Forecast
Expected range: upper limit 39100 yen - lower limit 38200 yen
The US stock market rebounded on the 24th of this weekend. The Dow average closed at 39069.59 dollars, 4.33 dollars higher (+ 0.01%) than the previous day, the NASDAQ closed at 16920.80, 184.77 points higher (+ 1.10%), and the S&P 500 closed at 5304.72, 36.88 points higher (+ 0.70%). Also, Nikkei 225 futures from the Taisen Night Session closed at 38800 yen, which is 200 yen higher than the regular closing price.
The Nikkei Average fell below the 75-day moving average, but remained above the 25-day moving average which turned to a steady upward trend. Since the lower cloud limit of the daily Ichimoku equilibrium chart is 38396 yen and almost the same level as the 25-day moving average, the 38400 yen level will continue to be recognized as a support line. Since the upper price is heavy, but the lower price is also firm, I can't really feel a sense of caution about the lower price. However, trading prices on the Prime market remain around 4 trillion yen, and market energy is scarce. Under circumstances where the scenario of the Nikkei average rise triggered by NVIDIA's financial results has collapsed, it is assumed that the situation where no sense of direction has been determined will continue.
Note that since a rebalance associated with the TOPIX regular review will occur on the 30th and a rebalance associated with the MSCI periodic review will occur on the 31st, there is a possibility that the trading price will increase to around 5 trillion yen over the weekend. ASICS ＜7936＞ will be newly adopted in the MSCI regular review, but 15 brands such as Shimizu Corporation ＜1803＞, Sharp ＜6753＞, Yamaha ＜7951＞, Tobu Railway ＜9001＞, and Odakyu Electric Railway ＜9007＞ will be excluded. Although it is a stock with a small index impact, many stocks adopted by the Nikkei Average are excluded, so I want to be careful about the timing of the big close on the 31st.
In response to rising long-term interest rates, declines in real estate stocks such as Mitsubishi Estate ＜8802＞ and Mitsui Fudosan ＜8801＞ are conspicuous in the stock market. Meanwhile, regional banks such as Concordia FG ＜7186＞ were bought slightly in bank stocks, which are representative interest rate increases, but megabanks such as Mitsubishi UFJFG (8306) have remained flat and no noticeable movements have been observed.
In response to the fact that long-term interest rates rose to the level for the first time in 12 years, the market did not have a favorable impression of “de-deflation,” and a sense of caution against sudden changes in market prices took precedence, showing a slightly negative reaction. Bank of Japan officials, such as Bank of Japan Governor Kazuo Ueda, will attend the international conference hosted by the Bank of Japan Institute of Monetary Research from 27th to 28th at the beginning of the week, so there is also a possibility that a sense of caution against surprise statements has intensified. Since the blackout period before the US Federal Open Market Committee (FOMC) is held in the middle of next week, there are also many lectures by senior US government officials. The situation where Japan-US interest rates are being swayed by statements made by senior Japanese and US government officials will continue.
■Exchange Market Outlook
Are the dollar and yen reluctant to rise next week? According to the US Federal Open Market Committee (FOMC) meeting summary announced on 5/22, although the inflation rate has declined, they agree on the view that it takes time to keep it down to the target value. The possibility of interest rate hikes was also shown depending on the situation. There is a growing possibility that the US Federal Reserve (Fed) policy interest rate will remain unchanged for a long period of time, and investors' dollar preferences are expected to continue. Japan's economic growth rate for the January-March period turned negative, and it seems that people are aware that the possibility of inflation acceleration is low.
However, caution against Japan's exchange intervention is strong, and the fact that Kanda Treasurer stated that “we are prepared to take necessary measures at any time” cannot be taken lightly. Therefore, it seems unlikely that risk-loving dollar buying/yen sales will expand further at a level of 157 yen or more. The fact that inflation expectations in the US have declined slightly also seems to be one reason to suppress a further rise in the dollar.
■Next week's featured schedule
5/27 (Monday): Bank of Japan Governor Ueda gives opening remarks at the 2024 International Conference hosted by the Bank of Japan Financial Research Institute, Bank of Japan Vice Governor Uchida gave a keynote speech at the same conference, China/Industrial Enterprise Profits (April), German/IFO Business Confidence Index (May), US-UK/Stock Markets closed due to public holidays, etc.
5/28 (Tue): Corporate Service Price Index (April), indicators to capture key inflation rates (Bank of Japan), Australian retail sales (April), US Consumer Confidence Index (May), Europe and European Central Bank (ECB) Eurozone CPI forecasts, US Cleveland Federal Bank President speaks at an event hosted by the Bank of Japan, US Minneapolis Fed President speaks at a forum, etc.
5/29 (Wednesday): Bank of Japan deliberation committee member Adachi gave a lecture at the Kumamoto Prefecture Financial and Economic Conference, the same press conference, the Australian Consumer Price Index (April), the German Consumer Price Index (May), the US Regional Federal Bank Economic Report (Beige Book) was published, the US/New York Fed President participated in the discussion, the South Asia general election, etc.
5/30 (Thursday): Europe/Eurozone unemployment rate (April), Europe/Eurozone consumer confidence index (May), US GDP revised value (January-March), US/second-hand housing sales contract index (April), US/New York Fed President gives a lecture, US Dallas Fed President gives a lecture, etc.
5/31 (Friday): Tokyo CPI (May), unemployment rate (April), effective job offer ratio (April), government bond purchase operation, implementation status of foreign exchange equilibrium operations (4/26-5/29), medium and manufacturing/non-manufacturing PMI (May), Europe/Eurozone Consumer Price Core Index (May), US Personal Consumption Expenditure (PCE) Price Core Index (April), US-MNI Chicago Purchasing Division Association Business Index (May), etc.