Buying of Japanese equities by overseas investors was reported to have reached a record level, heightening caution in the market. U.S. equities, meanwhile, are gradually regaining stability, with developments in technology companies' earnings and the upcoming midterm elections in focus.
Buying of Japanese equities by overseas investors was reported to have reached a record high, while selling pressure on AI and semiconductor-related stocks was also said to remain. The Nikkei 225 briefly fell below ¥64,000 on 19 October, raising awareness of downside risks, but recovered on dip-buying. Strong gains in INPEX and continued buying of BayCurrent and SHIFT supported the overall rise on the TSE Prime Market.
U.S. equity markets frequently showed signs of stabilizing. The Dow Jones Industrial Average was slightly lower than the previous day on 19 October, then rose by approximately $529 on 20 October and approximately $360 on 21 October. Rebounds in some technology stocks, earnings developments and movements in crude oil prices influenced the market, while the Nasdaq Composite alternated between rebounds and slight declines. Caution remained ahead of the midterm elections, although concerns about excessive AI investment provided support at times.
Regarding developments in China and related news, the Shanghai Composite edged higher on 19 October, while GDP growth of 4.5% exceeded market expectations. On 20 October, the unchanged LPR and expectations for monetary easing provided support, and measures announced by financial authorities were at times viewed as a "policy floor." The Shanghai Composite also fell on 21 October for the first time in four sessions, as caution over domestic demand and corporate earnings intensified. In addition, reports said the Chinese government was considering a 20% tax on wealthy individuals' overseas assets, with possible implications for asset transfers and the sales outlook for luxury brands.