Against the backdrop of preliminary results from the US midterm elections and a break below the 200-day moving average, investor sentiment deteriorated in some areas, and the Nikkei Average stood at ¥60,538.67 at the afternoon open, down ¥2,543.19 from the previous day.
The Nikkei Average stood at ¥60,538.67 at the afternoon open, down ¥2,543.19 from the previous day, widening its decline from the morning close as trading resumed. Nikkei 225 futures weakened during the lunch break, and selling led the market at the start of the afternoon session. As preliminary results from the US midterm elections weighed on the broader market, the yen strengthened and the dollar weakened to the low ¥157 range.
Expectations of further declines strengthened after the break below the 200-day moving average became clear. In Asian markets, the Shanghai Composite was flat and the Hang Seng Index was down only around 0.1%, while concerns about the profitability of export-related stocks persisted. By sector, nonferrous metals, oil and coal products, and electric appliances were among the biggest decliners, while domestic-demand sectors such as air transport, land transport and real estate were among the top gainers, producing a clear divide.
Shortly after 11 a.m., the Nikkei Average traded at around ¥1,900 below the previous day's level, and its decline widened by more than ¥600 after the afternoon session began. In the morning session, declines were particularly notable in Mitsui Chemicals, Taiyo Yuden, KOKUSAI ELECTRIC, Kyocera and Japanese stocks, while selling pressure on semiconductor-related stocks continued throughout the day. Meanwhile, Yamato Holdings, TOHO and Japan Airlines rose, and funds also shifted toward domestic-demand and transport-related stocks.
The decline was characterised by concentrated selling of high-tech and materials stocks and a shift of funds into domestic-demand stocks. Short-term volatile trading may continue depending on the outcome of the US midterm elections and currency movements, although dip-buying was also seen. The impact of movements in the SOX Index on the Tokyo market and the implications of the break below the 200-day moving average for the market ahead are likely to be key focuses.