Outlook for the Nikkei average this week [27-December-2020]

 [Present state recognition of fundamental]

Last week in the U.S., stock indexes rallied as Congress passed additional economic measures and uncertainty over the U.K.'s exit from the European Union receded. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is undervalued by 0.32 percentage points, taking into account the announced OECD real GDP forecast for 2021. This is due to the difference between the P/E ratio of the S&P 500 (26.6) and the forecasted P/E ratio of the Nikkei 225 (24.7), the difference between the U.S. and Japanese interest rates, and the difference in the GDP growth rate.

This is because the difference in the GDP growth rate between Japan and the U.S. in 2021 will be 0.32 points larger than the OECD forecasted value (Japan will be revised downward or the U.S. will be revised upward) compared to the current price of the Nikkei 225, or the P/E ratio of Nikkei 225 stocks for the current fiscal year will be about 26.8, or the Nikkei 225 will be 28920 yen The Japanese market is undervalued by about 2,260 yen in the medium to long term, since the Japanese and U.S. markets can be interpreted as being in balance.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was positive. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

③    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.8%, an improvement of 0.1 point from three months ago. The profit growth rate was -20.1%, an improvement of 2.2 percentage points from three months ago.

④    Although long-term interest rates in the U.S. declined and the interest rate gap between Japan and the U.S. narrowed from 0.95% to 0.92%, the exchange rate moved slightly at the 103-yen level.

⑤    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be +2.1%. The U.S. market is expected to be up 3.2%, which means that the Japanese market is 0.9 points worse off in this respect.  

⑥    December 3rd week was over buying. It is highly possible that December 4th week was over buying, and this week is expected to be over selling. Last week, ① was bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 3.4 points (about 910 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 5.1 points higher in the medium to long term (about 1360 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +26.4%, which has shrank positive width compared to last week. The 200-day moving average deviation rate was +18.4, which has shrank in the positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "green light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, the latest LIBOR rates are showing signs of rising, and caution is required. In March 2020, the LIBOR rate rose despite a decline in short-term interest rates, raising awareness of the possibility of renewed financial instability.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and upward trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 103 yen to 104 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

This week, in the US, key economic publications include wholesale inventories and goods trade balance, Case-Shiller home prices, pending home sales, Chicago PMI, and Dallas Fed Manufacturing Index. Elsewhere, China NBS PMIs and Japan industrial production will also be in the spotlight.

 

Last week, the Nikkei 225 temporarily fell below the assumed range. The upper price was about 360 yen below the assumed line and the lower price was about 130 yen below the assumed line. The expected range for the Nikkei 225 this week is between the Bollinger Band +1σ (currently around 26860 yen) on the upside and the Bollinger Band -1σ (currently around 26320 yen) on the downside.

Outlook for the Nikkei average this week [20-December-2020]

 [Present state recognition of fundamental]

In the U.S. market last week, stock indices rose on expectations of early passage of additional economic measures. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is undervalued by 0.29 percentage points, taking into account the announced OECD real GDP forecast for 2021. This is due to the difference between the P/E ratio of the S&P 500 (26.3) and the forecasted P/E ratio of the Nikkei 225 (24.9), the difference between the U.S. and Japanese interest rates, and the difference in the GDP growth rate.

This is because the difference in the GDP growth rate between Japan and the U.S. in 2021 will be 0.29 points larger than the OECD forecasted value (Japan will be revised downward or the U.S. will be revised upward) compared to the current price of the Nikkei 225, or the P/E ratio of Nikkei 225 stocks for the current fiscal year will be about 26.8, or the Nikkei 225 will be 28820 yen The Japanese market is undervalued by about 2,060 yen in the medium to long term, since the Japanese and U.S. markets can be interpreted as being in balance.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was positive. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.8%. 0.2 points worse than 3 months ago. Profit growth was -20.0%. 2.3 points worse than 3 months ago.

③    Although long-term interest rates in the U.S. rose and the interest rate gap between Japan and the U.S. widened from 0.89% to 0.95%, the yen moved higher in the range of 104 yen to 102 yen.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be +2.1%. The U.S. market is expected to be up 3.2%, which means that the Japanese market is 0.9 points worse off in this respect.  

⑤    December 2nd week was over buying. It is highly possible that December 3rd week was over buying, and this week is expected to be over selling. Last week, ① was bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 3.5 points (about 940 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has expanded. On the other hand, the difference in the 200-day line deviation rate from NYDow is 4.9 points higher in the medium to long term (about 1310 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +30.0%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +19.5, which was no change in the positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line but under the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "yellow light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and upward trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 103 yen to 104 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

This week, all eyes will be on US and UK Q3 GDP updates, as well as US personal income and spending, durable goods orders, and Japanese retail figures. It will also react to the U.S. stimulus talks and progress in post-Brexit trade negotiations.

 

Last week, the Nikkei 225 moved mostly within the expected range. The upper price was about 440 yen below the assumed line and the lower price was about 290 yen above the assumed line. The expected range for the Nikkei 225 this week is between the Bollinger Band +2 (currently around 27310 yen) on the upside and the 25-day line (currently around 26420 yen) on the downside.

Outlook for the Nikkei average this week [13-December-2020]

 [Present state recognition of fundamental]

Last week, the U.S. market failed to halt the spread of the new coronavirus, and the ruling and opposition parties failed to make progress in their talks over additional economic measures, causing stock indices to fall. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is undervalued by 0.17 percentage points, taking into account the announced OECD real GDP forecast for 2021. This is due to the difference between the P/E ratio of the S&P 500 (25.9) and the forecasted P/E ratio of the Nikkei 225 (24.9), the difference between the U.S. and Japanese interest rates, and the difference in the GDP growth rate.

This is because the difference in the GDP growth rate between Japan and the U.S. in 2021 will be 0.17 points larger than the OECD forecasted value (Japan will be revised downward or the U.S. will be revised upward) compared to the current price of the Nikkei 225, or the P/E ratio of Nikkei 225 stocks for the current fiscal year will be about 26.0, or the Nikkei 225 will be 27810 yen The Japanese market is undervalued by about 1,160 yen in the medium to long term, since the Japanese and U.S. markets can be interpreted as being in balance.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.8%. 0.2 points worse than 3 months ago. Profit growth was -20.4%. 2.8 points worse than 3 months ago.

③    Long-term interest rates in the U.S. declined, and the interest rate gap between Japan and the U.S. narrowed from 0.96% to 0.89%, and the exchange rate moved slightly in the range of 103 yen to 104 yen.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be +2.1%. The U.S. market is expected to be up 3.2%, which means that the Japanese market is 0.9 points worse off in this respect.  

⑤    December 1st week was over buying. It is highly possible that December 2nd week was over buying, and this week is expected to be over selling. Last week, ⑤ was bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 2.4 points (about 640 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 5.0 points higher in the medium to long term (about 1340 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +31.6%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +19.5, which shrank positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line but under the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "yellow light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and no trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 104 yen to 103 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

This week, central banks in the U.S., Japan, and the U.K. will make monetary policy decisions, and PMI surveys for the U.S., U.K., Eurozone, Japan, and Australia will provide some insight into the state of the global economic recovery. Other important releases include industrial production and retail sales in the US and China, inflation data in Canada and the UK, Tankan and inflation data in Japan, employment statistics in Australia, and consumer and wholesale prices in India.

 

Last week, the Nikkei 225 moved mostly within the expected range. The upside was about 80 yen below the assumed line and the downside was about 70 yen below the assumed line. The expected range for the Nikkei 225 this week is between the Bollinger Band +2 (currently around 27470 yen) on the upside and the 25-day line (currently around 26060 yen) on the downside.

Outlook for the Nikkei average this week [6-December-2020]

 

[Present state recognition of fundamental]

Last week the U.S. market indices rose on expectations for the early passage of additional economic measures. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is undervalued by 0.27 percentage points, taking into account the announced OECD real GDP forecast for 2021. This is due to the difference between the P/E ratio of the S&P 500 (26.0) and the forecasted P/E ratio of the Nikkei 225 (24.8), the difference between the U.S. and Japanese interest rates, and the difference in the GDP growth rate.

This is because the difference in the GDP growth rate between Japan and the U.S. in 2021 will be 0.27 points larger than the OECD forecasted value (Japan will be revised downward or the U.S. will be revised upward) compared to the current price of the Nikkei 225, or the P/E ratio of Nikkei 225 stocks for the current fiscal year will be about 26.6, or the Nikkei 225 will be 28,700 yen The Japanese market is undervalued by about 1,950 yen in the medium to long term, since the Japanese and U.S. markets can be interpreted as being in balance.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was flat. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.7%. 0.3 points worse than 3 months ago. Profit growth was -20.8%. 3.0 points worse than 3 months ago.

③    The U.S. long-term interest rate rose, the difference between the Japanese and U.S. interest rates widened from 0.82% to 0.96%, and the foreign exchange rate moved slightly lower in the range of 103 to 104 yen.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be +2.1%. The U.S. market is expected to be up 3.2%, which means that the Japanese market is 0.9 points worse off in this respect.  

⑤    November 4th week was over buying. It is highly possible that December 1st week was over buying, and this week is expected to be over selling. Last week, ① was bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 2.4 points (about 640 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 5.0 points higher in the medium to long term (about 1340 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +36.9%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +20.3, which unchanged positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "green light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and upward trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 104 yen to 103 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

This week, the status of the coronavirus around the world and the negotiation of a post-Brexit trade deal will dominate the headlines. Other highlights will include monetary policy meetings in the Eurozone, Brazil and Canada, and the latest GDP numbers from Japan, the Eurozone and the UK. Other important releases include inflation data from the U.S. and China, consumer sentiment from the U.S. and Australia, foreign trade from the U.K. and China, industrial production from Germany and India, and machinery orders from Japan.

 

Last week, the Nikkei 225 moved within the expected range. The upper price was about 450 yen below the assumed range and the lower price was about 40 yen above the assumed range. This week's Nikkei 225 is expected to move between the Bollinger Band +1σ+300 yen (currently near 26910 yen) and the Bollinger Band +1σ-300 yen (currently near 26310 yen).

Outlook for the Nikkei average this week [29-November-2020]

 

[Present state recognition of fundamental]

U.S. markets last week saw stock indices rise on expectations of a smooth transition of power and the spread of a vaccine for the new coronavirus. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is the published OECD real GDP forecast for 2021 The Japanese market is overvalued by 0.99 points, considering the announced OECD real GDP forecast for 2021. The reason for the overvaluation is the difference between the P/E of the S&P500 at 26.0 and the expected P/E of 24.8 of the Nikkei 225 stocks for the current fiscal year, as well as the difference between Japanese and U.S. interest rates and GDP growth.

This means that if the difference in the GDP growth rate between Japan and the U.S. in 2021 is further decrease by 0.99% compared to the OECD forecast (Japan is revised downward or the U.S. is revised upward), or if the PER of the Nikkei 225 stocks for the current term is around 19.9 or if the Nikkei 225 is around 21390 yen, the Japanese market is overvalued by 5260 yen in the medium to long term , which is roughly balanced.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was flat. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.9%. 0.1 points worse than 3 months ago. Profit growth was -19.8%. 2.3 points worse than 3 months ago.

③    The U.S. long-term interest rates rose, with the interest rate differential between the U.S. and Japan remaining unchanged at 0.82% to 0.82% and the yen moving slightly lower at the 103 to 104 yen level.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be +2.1%. The U.S. market is expected to be up 4.1%, which means that the Japanese market is 2.0 points worse off in this respect.  

⑤    November 3rd week was over buying. It is highly possible that November 4th week was over buying, and this week is expected to be over selling. Last week, ① was bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 0.9 points (about 240 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 6.0 points higher in the medium to long term (about 1600 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +39.9%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +20.3, which shrank positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "green light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and upward trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 104 yen to 103 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

All eyes turn to US Fed Chair Powell's testimony before Congress this week, as well as the US jobs report due Friday, which will probably point to a further slowdown in the labor market recovery. Elsewhere, GDP data for Brazil, Australia, Turkey and Canada will be in the spotlight as well as worldwide manufacturing and services PMI surveys and monetary policy action by the RBA and RBI. Other releases include trade figures for the US and Canada, factory orders for the US and Germany, industrial output and retail sales for Japan and South Korea.

 

Last week the Nikkei 225 was above the expected range. The upper price was about 570 yen above the assumed range, and the lower price was about 920 yen above the assumed range. This week's Nikkei 225 is expected to move between Bollinger Band + 2σ (now around 27150 yen) and Bollinger Band + 1σ (now around 25970 yen).

Outlook for the Nikkei average this week [22-November-2020]

 [Present state recognition of fundamental]

Last week, the U.S. market oscillated between expectations of widespread adoption of a new coronavirus vaccine and caution over the re-spreading of the new coronavirus On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is the published OECD real GDP forecast for 2021 The Japanese market is overvalued by 1.33 points, considering the announced OECD real GDP forecast for 2021. The reason for the overvaluation is the difference between the P/E of the S&P500 at 25.5 and the expected P/E of 24.0 of the Nikkei 225 stocks for the current fiscal year, as well as the difference between Japanese and U.S. interest rates and GDP growth.

This means that if the difference in the GDP growth rate between Japan and the U.S. in 2021 is further decrease by 1.33% compared to the OECD forecast (Japan is revised downward or the U.S. is revised upward), or if the PER of the Nikkei 225 stocks for the current term is around 18.2 or if the Nikkei 225 is around 19370 yen, the Japanese market is overvalued by 6160 yen in the medium to long term , which is roughly balanced.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was flat. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.9%. 0.1 points worse than 3 months ago. Profit growth was -20.1%. 2.5 points worse than 3 months ago.

③    The U.S. long-term interest rate declined, the difference between the Japanese and U.S. interest rates narrowed from 0.88% to 0.82%, and the yen appreciated from 105 yen to 103 yen.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be -.0.5%. The U.S. market is expected to be up 1.9%, which means that the Japanese market is 2.4 points worse off in this respect.  

⑤    November 2nd week was over buying. It is highly possible that November 3rd week was over selling, and this week is expected to be over selling. Last week, ① and ③were bearish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 2.8 points (about 710 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 3.7 points higher in the medium to long term (about 940 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +28.9%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +15.6, which shrank positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line but under the 9th line. The "yellow light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line bu under the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "yellow light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and no trend in the short term. The Japanese market is upward trend in the medium term and no trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 103 yen to 102 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

All eyes will be on the Fed and ECB minutes this week, along with PMIs from the US, UK, Eurozone and Australia. Also in the U.S., third quarter GDP revisions, durable goods orders, personal income and spending, and the house price index will be released.

 

Last week, the Nikkei 225 was above the expected range. The upper price was about 230 yen above the assumed range, and the lower price was about 300 yen above the assumed range. This week's Nikkei 225 is expected to move between the Bollinger Band +1σ+500 yen (currently near 25830 yen) and the Bollinger Band +1σ-500 yen (currently near 24830 yen).

Outlook for the Nikkei average this week [15-November-2020]

 [Present state recognition of fundamental]

Last week, the U.S. market saw a rise in economy-sensitive stocks on hopes of a new coronavirus vaccine spreading, but a decline in tech stocks. On the other hand, in the medium to long term, the spread of new types of pneumonia, an inward political situation centered on the world's own country, a lack of creditworthiness and credit crunch of banks, a slowdown in China and other economies, a fear of a slowdown in the global economy due to trade wars, etc. The geopolitical risks of the Middle East, the Korean Peninsula and Ukraine need continued attention.

 

The difference in the yield spread between the Japanese and U.S. markets is the published OECD real GDP forecast for 2021 The Japanese market is overvalued by 1.16 points, considering the announced OECD real GDP forecast for 2021. The reason for the overvaluation is the difference between the P/E of the S&P500 at 25.7 and the expected P/E of 23.5 of the Nikkei 225 stocks for the current fiscal year, as well as the difference between Japanese and U.S. interest rates and GDP growth.

This means that if the difference in the GDP growth rate between Japan and the U.S. in 2021 is further decrease by 1.16% compared to the OECD forecast (Japan is revised downward or the U.S. is revised upward), or if the PER of the Nikkei 225 stocks for the current term is around 18.5 or if the Nikkei 225 is around 19930 yen, the Japanese market is overvalued by 5450 yen in the medium to long term , which is roughly balanced.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

① Rising US market

② UP of expected profit increase rate for the current term more than before

③ Expansion of the interest rate differential between Japan and the US and further depreciation of the yen

④ Upward revision of Japan's 2021 GDP estimate (now -0.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    Last week's NYDow weekly trend was positive. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. NASDAQ weekly trend was negative. The daily footstep is above the 200-day line and the clouds of the Ichimoku kinko table. It will be interesting to see if NYDow can hold above the 25-day line.

②    As a result of the announcement of the quarterly financial results, the forecasted ROE of the Nikkei 225 stocks was 4.9%. 0.1 points worse than 3 months ago. Profit growth was -19.7%. 2.3 points worse than 3 months ago.

③    The U.S. long-term interest rate increased, the difference between the Japanese and U.S. interest rates widened from 0.81% to 0.88%, and the yen depreciated in the range of ¥103 to ¥105.

④    The OECD's real GDP growth forecasts for Japan and the U.S. for 2021 were released, and Japan's GDP growth rate is expected to be -.0.5%. The U.S. market is expected to be up 1.9%, which means that the Japanese market is 2.4 points worse off in this respect.  

⑤    November 1st week was over buying. It is highly possible that November 2nd week was over buying, and this week is expected to be over buying. Last week, ① and ③were bullish factor. This week, ①②③⑤ are expected to have an influence.

 

[Technical viewpoint]

Looking at the Japanese market from a technical point of view, the difference in the 200-day line deviation rate from NASDAQ is 3.6 points (about 910 yen when considering the Nikkei average) cheaper in the medium to long term. Compared to last week, the bargain range has shrank. On the other hand, the difference in the 200-day line deviation rate from NYDow is 2.5 points higher in the medium to long term (about 630 yen when considering the Nikkei average).

 

The Nikkei 225 is above the clouds in the Ichimoku Kinko table. The total deviation rate was +30.3%, which shrank positive width compared to last week. The 200-day moving average deviation rate was +15.2, which shrank positive width. As the three factors are positive, the "green light" is lit in the medium term trend.

The Nikkei 225 is above the 25th line and the 9th line. The "green light" is lit in short-term trends.

 

In the US market, NY Dow is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds in the Ichimoku Kinko table. Nasdaq is above the 200 day line and the 25 day line and the 9 day line. It is above the clouds of the Ichimoku Kinko table.

In the short term, the "green light" is lit, and in the medium term, the "green light" is lit.

 

[Outlook for this week]

Looking at the US market fundamentally, concerns such as interest rate hikes in the United States, US-China trade friction, North Korea issues are receding However, Spread of pneumonia infection by new coronavirus, US political uncertainty, falling crude oil prices, worsening U.S. corporate earnings, falling high yield bond markets , global long-term interest rate decline trend, financial market turmoil caused by credit slumps, lack of creditworthiness and political situation of EU banks, global economic slowdown concern with trade war, geopolitical risk of the Middle East and Ukraine Etc exist as a risk factor.

 

In addition, although the LIBOR interest rate has recently been declining, in March, the LIBOR interest rate has risen despite a decline in short-term interest rates, so there is a concern that financial instability may recur.

 

On the other hand, good news is the US zero interest rate policy, the Fed's direct financial support to companies including the purchase of junk bonds, economic measures of $ 3 trillion, and President Trump's policy expectations, monetary easing measures such as the Bank of Japan's 2% inflation target, the introduction of negative interest rates and the purchase of unlimited Japanese government bonds and 12 trillion yen in ETFs, as well as expectations for economic measures by the Japanese government that exceed the level of the Lehman Shock, Established 92 trillion yen corona reconstruction fund by EU, and the ECB's announcement of deepening negative interest rates and expanding quantitative easing.

 

Looking at the technical aspect, the US market is upward trend in the medium term　and upward trend in the short term. The Japanese market is upward trend in the medium term and upward trend in the short term.

 

Analyzing the currency market, the yen has been moving gently in the direction of strength for the last six months. This week, we expect the yen to be in the 104 yen to 103 yen range.

From now on, we need to pay attention to technical indicators, US market trends, exchange rate movements, and foreign investor trends.

 

This week, investors will continue to monitor the spread and impact of the pandemic on the global economy while the third-quarter earnings season will come to a close. Elsewhere, key economic data include US retail sales, industrial production, housing starts, building permits and existing home sales; China industrial production and retail sales; UK retail sales and inflation; Euro Area consumer sentiment; and Japan inflation and flash PMIs.

 

Last week, the Nikkei 225 was above the expected range. The upper price was about 320 yen above the assumed range, and the lower price was about 590 yen above the assumed range. This week's Nikkei 225 is expected to move between Bollinger Band +2σ+100 yen (currently near 25410 yen) on the upside and Bollinger Band +1σ-200 yen (currently near 24400 yen) on the downside.