【Fujitomi】Nikkei average falls for the fourth day in a row as markets sour on U.S.-North Korea provocation situation

The Nikkei average finished lower for the fourth consecutive day, closing at 18,335.63 yen, down 91.21 yen (0.49%) from the previous day. Although the Bank of Japan’s ETF purchases were observed, North Korea risks were in focus, boosting a risk-off mood. NBC News reported that “if there is a conviction that North Korea’s nuclear test will be forced ahead, the United States may carry out a preemptive strike,” which heightened vigilance further. North Korea’s Foreign Minister Choe Son-hong stated that if the supreme leader deems it appropriate, a nuclear test could be conducted at any time, and if they choose to, “we will enter into war.” The U.S. military dropped what is described as the strongest conventional bomb in history on an Islamic State base in Afghanistan on the 13th.

TOPIX finished at 1,459.07, down 9.24 points (0.63%). The total trading value on the First Section of the Tokyo Stock Exchange was 2.0247 trillion yen, with a trading volume of 1.83885 billion shares. The number of declining issues on the First Section was 1,559, rising issues 359, and unchanged 97.

Today’s opening price reflected the special settlement price (SQ) calculation for the April options, with the SQ at 18,613.29 yen, 186.45 yen above the previous session’s close. This contrasted with the softer start of TOPIX. The April options and Nikkei futures mini contracts’ SQ calculations implied a substantial net buy, with 350,000 shares sold and 460,000 shares bought. The weighted index inflow was estimated at around 80–90 billion yen, slightly net buying.

Nikkei futures formed a candlestick with a down day for the ninth consecutive session. The near-term support target is the December low (18,220 yen), with a medium-term support around the 200-day moving average (17,834 yen). However, if war breaks out between North Korea and the United States, a large drop cannot be ruled out.

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