Musha Ryoji (武者陵司) considers a sharp decline in US stocks unlikely regardless of the outcome of the US midterm elections, with the key factors for stock prices expected to be reduced uncertainty over post-election policy management and movements in long-term US interest rates. The impact on the dollar/yen market and spillover to Japanese stocks are also considered limited.
Regardless of the outcome of the US midterm elections, Musha Ryoji (武者陵司) considers a sharp decline in US stocks unlikely. Views were presented that movements in long-term interest rates and the stability of policy management will determine the market’s reaction.
Although past trends suggest that political uncertainty may decline after midterm elections, increasing capital inflows into the stock market, the impact could vary depending on interest-rate movements and corporate earnings.
For crypto assets, policies to maintain the dollar’s international standing are considered important, and no major overhaul of the GENIUS Act framework itself is expected.
The impact of US stock movements on Japanese stocks is considered limited, while expectations for growth in Japanese stocks and inflows of overseas capital could provide support.
Overall, post-election policy management and movements in long-term US interest rates are considered the main factors determining future stock price movements, with a sharp rise in interest rates identified as the greatest potential risk.