Why does it move up and down so much
We have set the Nikkei stock average range at 28,500 to 29,500 yen, but even within this range, last week from the high of 29,489 yen on Wednesday the 20th to the low of 28,546 yen on Friday the 22nd, and this week from 28,472 yen on Monday the 25th to 29,160 yen on Tuesday the 26th, have seen a rebound from the upper to the lower end of the range.
The U.S. market is moving firmly, yet the Nikkei’s price action is unclear.
This is due to uncertainties such as the trajectory of the sixth wave of the new coronavirus, how many seats the Liberal Democratic Party will hold in the House of Representatives election, and waiting for earnings results, which cloud the direction.
Typically, elections tend to create an uptrend, but there is a view that the new Prime Minister Kishida is not very welcomed by the stock market.
This is said to be because distribution is framed as a major policy theme of his administration, while growth that foreigners expect (policies that massively inject funds into the market) is being deprioritized. For that reason as well, this week we are likely to see some online watching mood with the election on the 31st, fluctuating up and down.
General investors may wonder why, with such large fluctuations in the short term, their own stocks are not moving.
That is because the Nikkei index is being driven by futures. For example, on Wednesday the 20th, the Nikkei average was +40 yen at 29,255 yen, but this gain was pushed up by 76 yen thanks to two stocks, SoftBank and Fast Retailing, and the number of advancing stocks was 790 and the number of declining stocks was 1,280.
Originally, Nikkei gains tend to occur when the number of advancing stocks is slightly higher.
In other words, the large up-and-down moves over the past one to two weeks have been driven by futures, with only a portion of indices rising to move the Nikkei average. While the overall direction remains unsettled, once the election on the 31st is over, the direction is expected to become clearer.
Basically, due to the sense of lag behind in U.S. stocks, an upside in November seems likely.
× ![]()