The Growth Market Index and Mothers Index on the Tokyo Stock Exchange (TSE) have become the center of attention for investors and market observers.
These indices, primarily composed of technology-related stocks and growth stocks, play a vital role as indicators reflecting the performance of Japan’s emerging companies.
However, they have recently experienced three consecutive days of significant declines, casting a shadow of uncertainty and doubt over the entire market.
■ Key Factors Behind the Decline
Several key factors lie behind this sustained downturn.
The most prominent among them is the performance of the U.S. stock market. In particular, major U.S. indices such as the S&P 500, Dow Jones Industrial Average (DJIA), and Nasdaq Composite have recorded their lowest values since May 31.
This U.S. market decline has spilled over into the TSE.
The unexpected increase in job openings reported in the U.S. Bureau of Labor Statistics’ August Job Openings and Labor Turnover Survey (JOLTS) has altered expectations regarding U.S. interest rates.
The possibility of the Federal Reserve (FRB) considering additional interest rate hikes has heightened, contributing to market unease.
■ Impact on Individual Stocks and Sectors
Throughout this decline, specific individual stocks and sectors have been notably affected.
There has been a growing perception of overvaluation, especially in the case of growth stocks, particularly those in the technology sector, which has accelerated the decline.
Among individual stocks, companies like JDSC (Stock Code: 4418), LaboroAI (Stock Code: 5586), and TrustHD (Stock Code: 3286) experienced declines, amplifying selling pressure in the market.
Additionally, even among the top market capitalization stocks, companies like Visional (Stock Code: 4194) and Free (Stock Code: 4478) saw declines.
Looking at sectors, the decline was led by the general consumer goods and information technology sectors.
The technology-related stocks, in particular, were impacted as rising U.S. interest rates had repercussions across the entire sector. This situation has undoubtedly contributed to market anxiety.
■ Positive Factors in the Mix
On the other hand, there have been some positive factors in the market. Specific companies have released positive news, providing relief from market anxieties.
For example, Kagurazaka Capital (Stock Code: 3498) revised its mid-term management plan to achieve its goals in four years instead of the originally planned five, drawing market interest.
Similarly, BBD Initiative (Stock Code: 5259) initiated new services, and CellSeed (Stock Code: 7776) saw optimism stemming from the renewal of its permit for manufacturing regenerative medical products.
While these upward-moving stocks and positive news have temporarily soothed some market concerns, the overall trend has continued to be negative.
■ In Conclusion
The Growth Market Index and Mothers Index on the TSE have seen three consecutive days of decline, raising widespread concerns in the market.
This decline can be attributed to a combination of factors, including the sharp downturn in the U.S. stock market and concerns about rising long-term interest rates.
Market participants remain cautious about the possibility of the Federal Reserve making additional interest rate hikes.
While some companies have provided positive news that temporarily eased market worries, attention must remain on the trajectory of U.S. interest rates.
Market anxiety remains elevated, and the future development of the market is eagerly anticipated.
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