Unexpected market trends in the first half of the year

In the currency market, the yen fell to a 34-year low, surpassing 160 yen per dollar in April. Where will the market go in the second half after a turbulent first half? At the MoSaTe Premium Seminar in June, experts in stocks, currencies and bonds evaluated the first half and made bold predictions for the second half, taking into account factors such as inflation, financial policy and the US presidential election.

Good evening everyone. Thank you for attending the MoSaTe Premium Seminar. I am Akiko Sasa from TV Tokyo. It has been a while since I have given a seminar and given the current volatile market conditions, I feel a great sense of responsibility. I hope you all enjoy and gain insight into the current market trends. Let us take a moment to reflect on the first half of the market, where the yen briefly exceeded 160 yen per dollar in April. Although the dollar-yen exchange rate later fell, it has been on the rise again since the Bank of Japan’s decision on June 14 and is currently hovering around 159.50 yen per dollar, after briefly reaching almost 159.90 yen today.

In May, Japan’s long-term interest rate exceeded 1% for the first time in 11 years. The Nikkei Stock Average broke the 40,000 yen mark for the first time in March. Global stock markets, including the US, also reached record highs. With such a tumultuous first half, what can we expect in the second half? In this seminar, experts in stocks, foreign exchange and bonds will discuss the first half of the market and make bold predictions for the second half.

Let’s introduce our speakers. First, we have Hidetoshi Ohashi from Mizuho Securities, an expert in bonds and credits. Then, Tohru Sasaki from Fukuoka Financial Group, a specialist in foreign exchange. Finally, we have Kayu Muramatsu from Nami Capital, a specialist in equities. It’s the first time that these three experts have come together. Although it’s rare to have three specialists in the same studio, let’s make the most of this opportunity.

Let’s go through the seminar schedule. The first part discusses the unexpected market trends in the first half, analyzing the background of these trends in preparation for the second half. The second part outlines market scenarios for the second half, taking into account various factors such as financial policies in Japan and the US, the US presidential elections and political developments in Japan. The third part focuses on investment strategies from the second half to the next year, with experts providing insights on investment tips. Finally, we will answer your questions as time permits.

This first half has seen significant market movements. In the first part, our guests discuss what they found unexpected in their respective fields and analyze the background of these surprises. Let’s take a look at their unexpected findings.

Ohashi noted the significant rise in Japan’s long-term interest rates, which exceeded 1%. Sasaki pointed to the unexpectedly rapid rise in the dollar-yen exchange rate, which reached the annual target of 160 yen in April. Muramatsu highlighted the sharp rise in Japanese stocks, which broke historical records early in the year. These rapid and significant movements in various markets have surprised many.

For Muramatsu, the unexpected development was the rapid and significant rise in Japanese stocks, which reached 40,000 yen in March. Looking at the movements from February to March, the Nikkei Stock Average soared past historic highs, eventually reaching 41,087 yen on March 22. Muramatsu attributes this to a thin market environment, where short sellers were squeezed out, leading to a sharp rise. He also noted that this rise was faster than expected, driven by a combination of factors, including domestic and global economic conditions.

Sasaki said the yen’s rapid depreciation to 160 yen per dollar in April was unexpected. He had initially forecast this level for the end of the year. Sasaki attributed this to several factors, including the market’s reassessment of the U.S. interest rate outlook and the inherent weakness of the yen. He also highlighted the structural problems facing the yen, such as Japan’s negative real interest rates and deteriorating current account balance.

Finally, Ohashi discussed the unexpected rise in Japan’s long-term interest rate, which exceeded 1% in May. He noted that while he had expected a rise, the pace was faster than expected. This rapid rise was driven by market expectations of a shift in Bank of Japan policy, which became apparent after a meeting between Prime Minister Kishida and Bank of Japan Governor Ueda.

Given these unexpected developments in the first half, what can we expect in the second half? With upcoming events such as the US presidential election and possible changes in financial policy, the market is poised for further volatility.

Source: Business Intelligence