The transition to TOPIX's new index and developments in the U.S. midterm elections, both key November events for Japanese stocks, are reported on a factual basis with commentary from a Nomura Securities strategist.
The transition to TOPIX's new index and free-float adjustments are progressing as November events that could influence markets in Japan and the United States, with the total impact of buying and selling expected to be approximately ¥10 trillion. In addition, the second stage of the free-float adjustment is scheduled for the end of November, with an expected impact of approximately ¥2 trillion.
In the United States, preliminary results from the 3 November midterm elections will begin arriving from the 4th Japan time, and opinion polls have at times pointed to the ruling party being at a disadvantage. Regarding stock prices and diplomatic impacts after the midterm elections, Nomura Securities expressed the view that markets would recover, provided no particularly significant downside factors emerge, based on recent valuations and market sentiment.
In Japan, Diet deliberations on a bill to cut the consumption tax are scheduled from late October onward, with details on funding, restaurant support and future benefits expected to be developed. The Bank of Japan is expected to leave rates unchanged at its October monetary policy meeting, while the possibility of additional rate hikes from December onward is also expected to be discussed.
Companies scheduled to report interim results include Fanuc on 23 October, Advantest on 28 October and Tokyo Electron on 30 October, followed by Toyota Motor and Sony Group on 5 November and SoftBank Group on 10 November.
The impact of the TOPIX new-index transition and free-float adjustments is expected to be reflected in market supply and demand along with the transition work from the end of October onward. The source analyst report presents the specific event timing as the basis applicable at the time of distribution.