In the morning session on the 28th, the Nikkei Average edged lower. It rose temporarily after the open, but buying back erased the gains, while dollar-yen rose to the upper ¥158 range. The report also covers individual stock movements, the afternoon session's supply and demand outlook, and technical turning points.
In the morning session on the Tokyo Stock Exchange on the 28th, the Nikkei Average ended the morning's trading at ¥66,333.53, down approximately ¥30 from the previous weekend. It opened at ¥66,505.94 and extended its gains against the backdrop of higher US stocks, lower crude oil prices and lower long-term US yields, but profit-taking selling emerged after the initial buying ran its course, erasing the gains and pushing the index into negative territory.
Among individual stocks, SoftBank Group, Advantest, Recruit Holdings, Tokio Marine Holdings, Toyota Motor, HOYA and Disco rose, while Ibiden, Fast Retailing, Kioxia Holdings, Chugai Pharmaceutical, KDDI, Daiichi Sankyo, Lasertec, Shin-Etsu Chemical and TDK fell. By sector, insurance, banks and machinery rose, while metal products, pharmaceuticals and mining declined.
The afternoon session could erase the morning's gains. Buying from dividend reinvestment is expected at the close on the 28th and at the open on the 29th. The fact that the final trading day with rights for the end of September is approaching is cited as a factor affecting supply and demand in both sessions.
Dollar-yen rose from ¥158.34 to ¥158.92 on the morning of the 28th, with the yen's depreciation trend continuing against the backdrop of interest-rate trends in Japan and Europe and US economic data releases. Euro-yen remained in the lower ¥180 range, while euro-dollar traded between 1.1369 and 1.1382. Expectations for October rate hikes by the US Federal Reserve and the Bank of Japan will be in focus this week, with movements in either direction expected depending on the US economic data releases.
Technically, ¥156.70 and ¥158.50 are viewed as turning points. The 25-day, 200-day and 100-day moving averages are positioned at around ¥156.97, ¥158.48 and ¥159.54, respectively. Dollar-yen rose to around ¥159.03 the previous week, but the advance was capped as concerns about yen depreciation resurfaced in Japan and the US. This week, the market is expected to seek the direction of a range breakout through various events, centered on ¥156.70–¥158.50.
The corporate services price index for August rose 3.7% year on year, exceeding the previous month's 3.6%. The Bank of Japan's minutes suggested the possibility of gradually adjusting monetary accommodation and raising rates.