【Fujitomi】 Tokyo Stock Market: With rising geopolitical risks, selling may dominate the trend

In the New York foreign exchange market last weekend, the dollar retraced against the yen. The March US Consumer Price Index (CPI) came in below market expectations, and for the first time since February 2016 it declined month-on-month. Additionally, US Department of Commerce data showed that March retail sales fell for the second consecutive month.

In the overnight session of the June OSE 225 futures last weekend, it finished at 18,260 yen, down 60 yen from the daytime session. Because of Easter, the US stock market and the CME 225 futures market were closed.

North Korea unveiled a new ballistic missile during a military parade on the 15th, commemorating the 105th anniversary of the birth of former leader Kim Il-sung, and launched a ballistic missile on the 16th. The Nikkei Stock Average had fallen for four consecutive sessions through the end of last week, hitting a new low for the year, and although there is some potential for a rebound buying at the low, geopolitical tensions are likely to keep the yen strong and the dollar weak on the upside. Yonhap News reported that the US aircraft carrier Carl Vinson is scheduled to arrive on the east coast of Korea on the 25th, suggesting that the Japanese stock market may remain tense from this week into next week.

https://www.fujitomi.co.jp/?p=14507

【Buying factors】

・Expectations for demand/supply support from Bank of Japan ETF purchases

【Selling factors】

・North Korea ballistic missile test launches

・US March retail sales down 0.2%, down for two consecutive months

・US CPI for March down 0.3% from February, the first drop in 13 months

・Trump administration's policy execution remains uncertain

・Geopolitical risk in North Korea

・Greece debt crisis rekindling

・Uncertainty ahead of the French presidential election

【Other points of note】

○ Australia, New Zealand, Hong Kong, Germany, Switzerland, France, UK (all of the above are Easter Monday), South Africa (Family Day) are closed

・North Korea missile launch; US, China, and others discuss countermeasures, says White House aide

・Air China will suspend some Beijing–Pyongyang flights

・Turkish constitutional referendum approved expanding presidential powers with 51.5% in favor; opposition condemns

・US officials say a hard stance toward Russia should be taken

・US Treasury to defer label of China as a currency manipulator; currency report released

・Beijing tightens real estate regulations; development companies barred from selling investment housing

・US Apple to begin autonomous driving tests; California approves

・US Walmart in talks to acquire an online clothing retailer, reports say

・French judge calls for invalidation of Le Pen’s criminal immunity amid secretary salary allegations

・Explosive incident in Frankfurt, Germany

《Schedule》

13:00 Tokyo metropolitan area condominium releases (March)

15:15 Kuroda Haruhiko, Bank of Japan Governor, remarks

11:00 March China's industrial production

11:00 March China's retail sales

11:00 1–3 quarter GDP in China

21:30 April US NY Fed manufacturing index

23:00 April NAHB US Home Builders Association housing market index

18th 05:00 February US securities investment movements

18th 06:00 Fischer, Vice Chair of the Federal Reserve, lecture

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