The predicted range for the Nikkei Average this week is 38,000 yen to 40,000 yen | This week's market outlook | Moneyクリ MoneyX Securities' investment information and media useful for money.

With fewer ingredients, the awareness of summer withering comes to mind.

Last weekend, the Dow Jones Industrial Average fell for the fifth consecutive day in the U.S. stock market, closing down 542 points from the previous day. The U.S. employment statistics for July, released on the same day, showed an increase of 73,000 non-farm payroll jobs compared to the previous month, which was below market expectations. Additionally, the figures for May and June were significantly revised downwards. As a result, the three-month average saw an increase of only 35,000 jobs, the lowest level since June 2020, raising concerns about a slowdown in the U.S. economy and weighing on the U.S. stock market.

At one point, the dollar-yen exchange rate, which supported Japanese stocks by reaching 150 yen per dollar, has now reversed to a weaker dollar and stronger yen.

In the early morning of the 2nd, Japan time, the Nikkei average futures fell sharply in the night trading of the Osaka Exchange. It dropped nearly 1,000 yen and ended at 39,900 yen. It is almost certain that the Tokyo market will also start with a significant decline when it reopens on Monday.

In this context, there aren't many market factors this week. After passing through major events such as the House of Councillors election, US-Japan tariff negotiations, the FOMC (Federal Open Market Committee), the Bank of Japan's monetary policy meeting, and US employment statistics, the market is experiencing a sense of fatigue akin to "after the festival." As we enter the market in August, market participants are gradually thinning out, and the awareness of summer doldrums is becoming more pronounced.

In recent years, there tends to be a decrease in foreign buying during the summer. One point of interest is whether the foreign buying, which has been in surplus for 17 consecutive weeks, will be interrupted or continue as it is.

Japan's Financial Results Are in Full Swing: Focus on Toyota

The earnings announcements have passed their peak in the United States, but are just beginning in Japan. Notable companies in the U.S. include DuPont de Nemours [DD] and Advanced Micro Devices [AMD] on the 5th, Caterpillar [CAT], Pfizer [PFE], Super Micro Computer [SMCI], and on the 6th, Walt Disney [DIS] and McDonald's [MCD].

On the other hand, Japan will see earnings announcements this week from Mitsubishi UFJ Financial Group (8306) on the 4th, Mitsubishi Corporation (8058), Recruit (6098), Mitsubishi Heavy Industries (7011), Daikin (6367), Mitsui Fudosan (8801) on the 5th, NTT (9432), Honda Motor Co., Ltd. (7267), Fujifilm Holdings Corporation (4901), Kao Corporation (4452), IHI Corporation (7013), Kawasaki Heavy Industries (7012), and on the 7th, Toyota Motor Corporation (7203), Sony Group (6758), SoftBank Group (9984), Tokio Marine Holdings (8766), Mitsubishi Estate (8802), Fujikura (5803), Lasertec (6920), and on the 8th, Dai-ichi Life Holdings (8750), Obayashi Corporation (1802), and Sanrio (8136), marking the peak of earnings announcements this week.

As expected, Toyota is the focus. Although the automobile tariff has risen to 15%, there is a possibility of upward revision of the full-year forecast. The Nikkei reported in Saturday's morning edition that Toyota has conveyed its plan to major parts manufacturers to produce approximately 10 million units globally by 2025. Sales are strong, slightly exceeding the initial plan at the beginning of the year (around 9.9 million units), and if realized, it would approach the record high of 10.03 million units achieved in 2023. Amid significant fluctuations in the exchange rate, there are high expectations for Toyota's upward revision.

Attention to the LDP Joint Meeting of Both Houses on the 8th

Regarding domestic materials, I would like to pay attention to the joint meeting of the Liberal Democratic Party's members of both houses scheduled for the 8th. At the joint meeting of both houses on July 28, discussions lasted for four and a half hours, with calls for the Prime Minister's resignation erupting. There were also many opinions demanding a "general meeting" with voting rights instead of a "discussion session," which led to this week's event. However, the LDP's party rules do not have provisions for dismissing a party leader mid-term at a general meeting. Nevertheless, this is an important event for gauging whether the current administration will continue, and the market's attention will likely be directed towards it.

The expected range is set at 38,000 yen to 40,000 yen.