Nikkei Average Rises for 7th Straight Day, Hits Record High Above 71,900 Led by Semiconductors

Nikkei Average Rises for 7th Straight Trading Day, Updates Record High, Temporarily Above 71,900 On the Tokyo stock market on the 19th, the Nikkei Stock Average closed at 71,250 yen, up 196 yen from the previous day, and rose to 71,952 yen during trading hours. Driven by lower oil prices due to expectations for peace in the Middle East and a rise in U.S. stocks, semiconductor-related stocks centered on Advantest were bought. The Nikkei 225 futures also maintained the 71,990 yen level in overnight trading. 123

Yen Temporarily in Upper 161 Yen Range, Finance Minister Katayama Warns of "Decisive Measures" In the NY market on the 18th, the dollar-yen fell to the upper 161 yen range for the first time in about 1 year and 11 months. Expectations for a widening interest rate differential between Japan and the U.S. strengthened after the Fed indicated a rate hike outlook within the year. Finance Minister Katayama warned the market at a press conference on the 19th that "if there are speculative moves, we will take decisive measures," but the effect of verbal intervention is seen as limited. 45

BOJ April Meeting Minutes Show Divided Opinions on Rate Hike, 3 Out of 9 Proposed Raising to 1% The minutes of the BOJ's April meeting released on the 19th revealed that three members proposed raising the policy rate to 1.0% due to concerns about upside risks to prices. There were also opinions that "there is no need to rush a rate hike" due to uncertainty in the Middle East situation, and the decision was ultimately to maintain the status quo, but this led to a rate hike at the following June meeting. 6

BOJ Deputy Governor Himino: Impact of High Oil Prices on Consumer Prices "Around Summer" In a speech on the 19th, Deputy Governor Himino indicated that the full impact of rising crude oil prices due to the Middle East situation on domestic prices will likely occur around this summer. He reiterated the upside risks to prices that were the background to the BOJ's decision to raise rates to 1.0% in June, leaving room for future policy decisions. 7

BOJ Governor Ueda Discharged from Hospital, to Return to Official Duties from 23rd After Completing Treatment for Liver Cyst Infection The Bank of Japan announced on the 19th that Governor Kazuo Ueda, who had been hospitalized for a liver cyst infection, was discharged the same day. He will continue outpatient treatment for about two weeks but will return to work and perform official duties from the 23rd. The governor's absence also affected the June rate decision meeting, but his early return is likely to ease uncertainty over policy management. 89