【Fujitomi】Nikkei Average falls for three consecutive days, new intraday low for the year for the third day in a row; geopolitical risks such as North Korea continuing to smolder
The Nikkei Stock Average closed at 18,426.84, down 125.77 points (0.68%) for the third consecutive decline. In the Tokyo foreign exchange market, the yen traded in the upper 108 yen per dollar range briefly, marking the strongest yen and weakest dollar in about five months. Selling in Nikkei futures and export-related stocks weighed on the index, but as the dollar/yen rate stopped its decline toward the close, the Nikkei's losses narrowed.
Investors were wary of geopolitical risk as the dollar strengthened following President Trump’s remarks that appeared to curb dollar strength and support low interest rates, and as Reuters reported that North Korea appears to be preparing its nuclear test site. With tensions over North Korea’s nuclear development program rising, authorities in the country reportedly told foreign journalists covering the situation to prepare for a “large-scale and significant event.” In the afternoon, as word spread that a “big event” in North Korea would involve a new city street with tall buildings, the dollar/yen and Nikkei futures saw a buyback trigger. Optimistic speculation also arose that hard-line measures such as a nuclear test or missile launch might be delayed over the weekend.
TOPIX also fell for the third day in a row, closing down 11.23 points (0.76%) at 1,468.31. The aggregate trading value on the TSE First Section was 2.259 trillion yen, with a trading volume of 1.95868 billion shares. The number of declining issues on the First Section was 1,374, rising issues were 543, and 98 were unchanged.
What remains notable is whether there will be a meeting among Russia, Syria, and Iran tomorrow, and what kind of statements may come out...
Nikkei futures formed a long lower shadow on the downside. The index briefly fell to 18,300, the lowest level in four months since December 5 last year. The level around 18,308—38.2% of the rise from the November 9, last year low (16,090) to the March 2 this year high (19,680)—is seen as supportive. In the near term, a battle around the late-18,600s, where the 5-day moving average (18,630) and the turning line (18,685) converge, would be expected.
