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Stocks decline as yen strengthens; bonds rise amid economic uncertainty

On September 16, while the Japanese market was closed, the yen briefly surpassed the 140 yen mark, hitting 139.58 per dollar. This surge was driven by speculation that the Federal Open Market Committee (FOMC) would implement a 50 basis point interest rate cut, double the usual amount. Meanwhile, expectations are that the Bank of Japan (BOJ) may reinforce its stance on monetary easing at its upcoming meeting on September 19-20, should its economic outlook persist.

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Japanese stock market rebounds as Nvidia’s impact wanes; medium-term bonds in favor

Nvidia’s earnings report, released early on August 29 Japan time, revealed a forecast for the third quarter (August-October) that fell short of market expectations. This miss triggered a steep decline of over 8% in Nvidia’s shares during after-hours trading on U.S. markets. The company's forecast, coupled with issues related to new chip developments, initially spurred a sell-off in Japanese semiconductor stocks. However, the impact was mitigated by Nvidia’s stronger-than-anticipated second-quarter results, which helped to stabilize Japanese stocks related to the semiconductor sector. Additionally, gains in insurance and shipping stocks provided further support to the market.

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Nikkei stock average rebounds on weaker yen and technology boost

During the trading session, the Nikkei surged by over 2% before settling at its final figure. The broader Topix index also experienced gains, rising 1.1% to end the day at 2,670.54. The upward movement in the Nikkei was driven by domestic tech stocks tracking their U.S. counterparts higher, contributing to the overall positive performance of the benchmark index.

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Japanese Megabank SMFG sees potential amid market turmoil

Sumitomo Mitsui Financial Group (SMFG) remains an appealing investment despite recent market volatility, with potential upside from rate increases and strategic equity sales. The bank's strong profit growth and improved return on equity make it a contender to watch as Japanese financial markets recover.