【Fujitomi】Nikkei Stock Average Falls Below 19,000 Yen; Caution Flag Raised on Japan-U.S.-EU Political Risks
Tokyo stock market at the start of the week fell sharply. The Nikkei Stock Average closed at 18,985.59 yen, down 276.94 yen (1.44%) from Friday’s close. It closed below the 19,000 level for the first time since February 9, about a month and a half ago. The uncertainty in U.S. policy management rose as President Trump withdrew his flagship policy’s replacement for Obamacare, triggering risk-off sentiment and prompting yen appreciation. President Trump stated he would push ahead with a large tax cut lowering corporate and personal income taxes after withdrawing the Obamacare replacement; however, with a little over two months since his inauguration, market management has stumbled, leading to profit-taking selling dominating in the stock market. In Europe, on the 29th, the day after tomorrow, the United Kingdom will formally notify its exit from the European Union. Including the time required for the exit procedures, outlook remains obscured, and there is a possibility that yen buying from investors seeking risk-off will occur. Domestically, concerns remain over political instability surrounding the Moritomo Gakuen national land sale issue. On the other hand, expectations for domestic corporate earnings growth for the next fiscal year (year ending March 2018) and expectations for the Bank of Japan’s ETF purchases supported buying at the Tokyo stock market’s downside level.
TOPIX also fell for the first time in three days, finishing at 1,524.39, down 19.53 points (1.26%) from last week’s close. The trading value on the Tokyo Stock Exchange First Section was 2.031 trillion yen, and the trading volume was 1.76293 billion shares. The number of declining issues on the First Section was 1,671, rising issues 252, and unchanged 87.
