How will this November market behave
From the end of October to the beginning of November, most market opinions for November are bullish.
This is because, looking at the past ten years, the month has a high win rate with a 9-1 win-loss record for gains in the month-end compared to the previous month.
Furthermore, there is also an anomaly (rule of thumb) of “stock price rise three months after an election,” which contributed to a positive mood.
Following this mood, on Sunday, October 31, the Liberal Democratic Party won a solid absolute majority on its own, overturning expectations, causing a sharp rise on Monday, November 1, to 29,647 yen (+754 yen), and by Thursday the 4th it approached 30,000 yen at 29,880 yen.
Therefore, this week there were expectations to break through 30,000 yen, but despite the three US stock indices reaching record highs in the early part of the week, they did not move in tandem, and as of today, Wednesday the 10th, they have fallen for the third day in a row.
In my forecast for this week, I expected movement within a range of 29,000 to 30,000 yen, but the index easily slipped below 29,500 yen to 29,079 yen, and today it stood at 29,106 yen, down 178 yen.
Considering the post-election surge of 754 yen on Monday, November 1, a near-term pause in gains is expected, but reviewing subsequent movements, there is no particular bad news, yet a weaker yen and yesterday’s decline in US stocks are cited as factors, though it is unclear why.
If I were to put it plainly, the rise on the 1st reflects rising expectations for the unexpectedly victorious LDP and the inexperienced Kishida administration; as those expectations fade, the direction of Japan’s stock market may be perceived as being in the hands of the new administration (politics).
Many Western stocks are trading near their highs, while Japanese stocks are lagging, and although they do not necessarily follow the rise of US stocks, they tend to move in tandem with declines.
However, this week’s decline was seen as a lower bound at around 29,500 yen, and even though some viewed yesterday’s (Tuesday) 29,240 yen as a support level, today it fell to 29,079. Moreover, even if it falls further, the 13-week moving average around 29,000 yen is seen as a potential support.
If it breaks below 29,000 yen, a warning signal for November’s stock strength could arise, although earnings reports show a strong first half with good results for April–June, and while July–September results may not meet expectations, overall results are expected to be on par with the previous period.
Considering the past ten years where gains prevailed 9 times out of 10, unless negative factors emerge (e.g., declines in US stocks or a stronger yen), there is room for optimism from mid-November onward.
If a trigger occurs, recent movements have already shown daily gains of 500–1,000 yen, so there may be potential to test 30,000 yen again.
× ![]()