Stock Market Update: Nidec and Sony gained with the yen's retreat against the U.S. dollar

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The Nikkei Stock Average has gyrated in the vicinity of 23,000 yen for a week from September 7 to 11th. Although the market plunged sharply in some volatile movements on Wednesday, it recouped losses completely and closed higher on Friday showing resilience with a generally firm tone as the yen's retreat against the U.S. dollar helped bolster investor’s sentiment after a shaky start following another technology share rout on Wall Street overnight. 

Profit-taking was seen across the board at a time due to the depressed US high-tech stocks that have been driving the world stock market higher so far, but the Tokyo market has started rebounding toward the weekend and wrapped up at 23,406 yen, up 201 yen from the previous week.

Stock price changes of the Japanese largest companies (Sep.4 - Sep.11(%)) 

Recruit Holdings   8.1

Nidec Corporation    8.0

Sony   6.1

Daiichi Sankyo   5.8

Keyence   3.3

Fast Retailing  2.1

Chugai Pharmaceutical   1.9

Shin-Etsu Chemical   1.8

Takeda Pharmaceutical    1.7

Nikkei 225     0.9

NTT    0.0

Sony    -0.9

Nintendo    -1.0

NTT DOCOMO    -1.1

Mitsubishi UFJ Financial   -1.3

Toyota Motor    -1.3

KDDI    -1.8

Honda Motor    -3.7

Daikin Industries   -3.7

SoftBank   -4.4

SoftBank Group   -7.5

Nidec and Sony gained with the yen's retreat against the U.S. dollar

What investors need to surmise in the politics and market

In the coming weeks, the new Japanese prime minister and its new cabinet will be decided. A media reported its poll result showing a majority of Japanese firms want top government spokesman Yoshihide Suga to become the next prime minister as many see no need to change the status quo on stimulus policy amid coronavirus crisis. 

Investors will keep close watch on how the market reacts to the political movements next week. Investors also pay attention to the gap between the Tokyo stock exchange and the New York stock exchange. 

On a weekly basis, the NY Dow fell 2.1%, while the Nikkei Stock Average rose 0.9% this week. The NY Dow also fell 1.8% last week, while the Nikkei average rose 1.4%. Investors try to figure out whether the recent momentum to reevaluate value stocks continues. 

If so, Tokyo stock exchange, in which so many stocks are left undervalued with price - book ratio of 1 or less, may continue to outperform the US market.

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