Today’s Japanese Stock Market Strategy
Strategies
- Buy mid-cap semiconductor stocks.
- Sell high-tech stocks.
Explanation
Futures have already dropped by over 1%, so it takes courage to sell further declines from here. If the overall sentiment continues to worsen even after physical stocks have stabilized, it’s advisable to focus on selling high-tech stocks.
On the other hand, it’s recommended to buy mid-cap semiconductor stocks. Companies like TOWA and Rorze have experienced rapid increases, so they are likely to open lower today. There’s a high possibility of some selling pressure, but the market won’t be entirely bearish. If there’s an opportunity for buying interest, it’s wise to jump in.
Review of Today’s Japanese Stock Market
Prominent Movers
- Daiichi Sankyo
- Nishimatsuya
- SHIFT
- TOWA
Explanation
The day didn’t witness a catastrophic drop in high-tech stocks. The decline from the opening wasn’t significantly large. Large-cap semiconductors managed to reduce their decline rates significantly from the opening, and the Mothers Index showed an upward trend with lower shadows.
I was hoping for a chance to switch to mid-cap semiconductor stocks for buying, but that opportunity didn’t arise until the afternoon session. The morning’s decline was honestly staggering, showcasing the recoil from the recent rapid ascent. Considering today’s movements as the initial correction, it’s essential to observe whether the market can establish new highs in the future.
Daiichi Sankyo surged by 14% due to developments with Merck. Nishimatsuya rose by 14% with significant holdings by Effissimo. SHIFT experienced a 5% decline without specific news. Seeing Baycurrent hitting new lows and SHIFT dropping significantly, it feels like the end of an era. We should watch for stocks that could lead the market like them in the future.
Conclusion
Bond yields increased, with the 10-year bond yield approaching 5%. On the other hand, the spread between long and short-term interest rates narrowed. Stocks continue to face the worst-case scenario.
