Mr. Hiroshi Arano: a market similar to January through March continues, but

Publication date: 2017/04/02 06:04

Three-month consolidation market

A month ago I wrote that February would mirror January's futures market, and March would continue as well,
and it seems this has indeed come to pass.
It feels that way.
Below are representative monthly market figures for January, February, and March.
The trends are so similar that it is difficult to discern differences.


（Monthly Market）　January　　 February　 March
Nikkei Stock Average
End-of-month values: 19,041 19,118 18,909
Month-to-date average: 19,194 19,188 19,340
High: 19,594 19,459 19,633
Low: 18,787 18,907 18,909
Intraday range: 167 164 138
Change: 0.87% 0.85% 0.71%

USD/JPY: 114.67 113.11 113.01
In dollars: 167 dollars 170 dollars 171 dollars

P/E: 16.4x 15.8x 16.0x
PBR: 1.34x 1.29x 1.29x

New highs: 110 117 112

Advance-Decline Ratio: 97.9% 109.8% 93.2%

There were moments on 3/13 when the market hit a new high on the opening, but basically it was a range-bound market between 19,000 and 19,500 yen. The backdrop was that the USD/JPY exchange rate had stayed within around 113 yen ±2 yen.




The range and volatility of the Nikkei Stock Average were subdued; compared with January and February, moves have been even more lackluster. There are no strong upward-leaning expectations nor major concerns about a breakdown—the market remains in a calm state.




From an investment indicators perspective, PER is around 16x and PBR around 1.3x, with little variation.
There are no significant changes in the average movements.
On the other hand, there were two attempts to reach around the 19,600 yen level at the beginning and middle of the month, and the average daily number of new highs was 112, similar to January and February.

As the month progressed, it took on a stronger corrective tone; the advance-decline ratio fell to around 93%.



The new fiscal year market from tomorrow will open below 19,000 yen, but there are no signs yet of breaking the three-month stalemate at the moment.


U.S. stock gains have cooled, U.S. interest rates have risen, and the trend of a stronger dollar and weaker yen has also paused.

From external factors, the upside momentum has weakened, and, as in January–March, moves are expected to continue with a ceiling around 19,500–19,600 yen.

We must conclude accordingly.