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[Tokio, 26 de Reuters]- In the Tokyo market on the 26th, the prices of stocks, bonds and the yen have depreciated by triples. The opinions of market participants are as follows.
● The end of the financial market, watch out for inflation in the future.
The biggest factor behind the fall in US stocks yesterday was the sharp rise in US long-term interest rates. Until now, the increase in the expected inflation rate, which reflects the expectations of economic recovery, has been the main focus, but the real interest rate has increased considerably in the last two weeks. Rising real interest rates slows down private investment activity and poses a risk of economic recession. It tends to be a factor that lowers the PER (price-earnings ratio), and there is a “bad interest rate hike” aspect that leads to a drop in the stock market.
Adjustments to the end of the financial market are also likely to have been made. The background to the rise in interest rates is the fiscal mobilization of the US Biden administration and the expectations of economic recovery, and in the future it will shift to a “performance market” led by the recovery of corporate performance and EPS (net earnings per share). Interest rates have risen dramatically during that off-season and the financial market is about to end, but the US Federal Reserve (FRB) is on the prowl and the market is in shock.
Another major risk besides interest rates is inflation. The rise in prices due to the economic recovery is “good inflation”, but the current situation is that inflation is advancing due to the push of costs when you observe the increase in the prices of crude oil and raw materials. As inflation continues, the Fed will have to adjust monetary easing. That would be a cause for concern if the Fed also had an uncontrollable rise in interest rates.
● Postponement of the purchase of Bank of Japan ETFs makes the stock market psychologically dominant
Although it depends on the rise in US interest rates and the evolution of the stock market, in terms of factors specific to Japanese stocks, whether the purchase of ETFs by the BOJ, which has recently been postponed in the bear phase, it will be a condition for the immediate fund. That’s all.
It is true that the Bank of Japan has given ETF selling a psychological advantage as it postponed ETF buying, making it easier to start selling from the front. If the Bank of Japan makes a purchase later today, the selling advantage will recede and the disadvantage after the Nikkei 225 autonomously rallies will be less. Even if the quantity is small, you can assume that you will buy a lot in the event of a drop simply by showing your buying attitude. On the other hand, if the BOJ does not buy it, the decline is expected to be large when the formation weakens.
On the other hand, in terms of color, the collapse of growth stocks has caused the index to fall, but on the other hand, stocks that are firm in values are also conspicuous, and as a result, the rate of decline in TOPIX is smaller than the current Nikkei average. Given that crude oil prices have been relatively stable amid risk offsets for financial products as a whole, it can be said that there is no change in the move to buy the economic normalization trend. Also, in March, dividend rights will be taken into account, so once the bottom is touched, growth stocks will be slow while value stocks will support the market.
● If the long-term interest rate is 0.2%, the Bank of Japan will be sent.
There was no temporary operation by the Bank of Japan at 10:10 am today. Interest rates have stabilized somewhat since the steep rise in the morning, and the Bank of Japan may have decided that interest rates are unlikely to rise in one direction, even if they are not dispatched at this point in the session. previous.
However, today is also the weekend, and there is still a possibility that the position adjustment sales will come out again after this, and if the situation is such that (10-year interest rate) goes to 0.2%, it is they will take some actions there. There is still the possibility of coming out of the closet.
Also, BOJ governor Kuroda is said to have been summoned to the Diet today, and although it depends on the question there, there is a possibility that the governor will make some statements to curb the rise in interest rates.
Regarding the immediate trends in US interest rates, we believe that unstable market trends may continue. On the other hand, the long-term domestic interest rate depends on the future actions of the Bank of Japan and the trend of the US interest rate, but there is no solid reason not to add 0.2%, and the 0.2% is already in sight. . In that case, the Bank of Japan may control its movements by taking actions (such as reverse operations) at that level, and 0.2% can be said to be the immediate upper limit.
We do not expect any particular changes to the “transaction document” announced tonight (scheduled for the month of the long-term purchase transaction in March).
● Towards the adjustment phase, risk reduction trend in March
There are various opinions about rising long-term interest rates in the United States, but this time the point is the rise in real interest rates. Increasing the expected inflation rate alone does not have a significant impact on stock prices, but this time the real interest rate is also increasing.
“Tantram without a cone” has been whispered in the market these days. The chairman of the Federal Reserve of the United States, Powell, continues being moderate, but the market begins to suspect. In terms of positions, call and put indices are declining and shorts are also accumulating in volatility index (VIX) futures. Stocks could adjust in the future in a way that corrects the market inequality that has built up so far.
Given that next week will be the start of the month, economic indicators such as the US ISM Manufacturing Index will be released in February. Stock prices have continued to rise in anticipation of the economic recovery these days, and Even if the economic indicators are good, the shares can “actually sell.” Also, since fund managers refrain from conducting evaluations at the end of the fiscal year, they tend to reduce risk and sell profits from February to March. At the moment, we must be careful with fluctuations.
