textbook-style risk-off reversal! ~ December 27 highlights and schedule ~

Yesterday's Tokyo market saw stock prices swing wildly,the Nikkei average briefly fell below 19,000 yen.As expected, there were buy orders when it briefly dropped below 19,000 yen and it rebounded. After that, in New York, attention focused on the reaction after Christmas holidays, but there was a record rebound, the Dow Jones average rose by 1,000 points for the first time, and other indices including the three U.S. stock indices and Nikkei futures all rose sharply.Concerns about the dismissal of Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin appear to have been dispelledwhich seems to have provided an additional boost. This rise is also seen as possibly being a. textbook-style unwind of risk-offcategory.

◎ Today's Points of Focus

1) U.S. Congress resumes after Christmas recess

The U.S. Congress will resume after the Christmas recess. The focus is on the budget bill. Last weekend, the U.S. House of Representatives passed funding for the border wall with Mexico. However, it was rejected by the Senate, leading President Trump to order a partial government shutdown.President Trump has indicated a willingness to prolong a partial government shutdown, suggesting little compromise on the budget bill.With today’s resumption of the session, will the budget bill pass the Senate? This is something to watch.

2) Tokyo market reactions

In New York, as observers say is a “textbook unwind of risk-off,” stock indices, crude oil prices, and long-term interest rates rose. The question is whether Tokyo can follow the trend. Also, the line to watch is likely the “Nikkei average at 20,000.” The Dow’s record rise in New York yesterday has pushed Nikkei futures above 20,000 yen.

◎ Today’s Event Schedule

12/27 (Thursday)

18:00 EURECB Monthly Report

12/28 (Friday)

00:00 USDConsumer Confidence Index
03:00 USD 7-year Bond Auction
08:50 JPYBank of Japan Monetary Policy Meeting, Key Opinions