Tokyo’s cash equity session opens at 9:00 a.m. JST, with Japan’s first estimate of Q3 GDP landing just 10 minutes earlier—setting the tone for Monday’s trade. 1
Snapshot before the bell
- Futures: CME Nikkei 225 (USD) futures were up ~0.7% around 50,510 late Sunday U.S. time, pointing to a steadier start after Friday’s sell‑off. 2
- FX: The dollar/yen hovers near 154.5, after slipping late last week; Japan’s finance minister reiterated high vigilance on the FX slide. A firmer yen at the open would typically pressure exporters. 3
- Wall Street lead: U.S. stocks ended mixed on Friday (S&P 500 −0.05%, Nasdaq +0.13%) as traders turned to Nvidia’s mid‑week earnings for direction. 4
- Oil & yields:Brent settled near $62–63 last week amid oversupply signals, while U.S. 10‑year yields hovered just above 4.0%—a combination that can aid Japan’s energy importers but tighten global financial conditions. 5
- Where we closed: The Nikkei 225 finished Friday at 50,377 (−1.77%), leaving the index just above the key 50,000 handle and well below the Oct 29 record close of 51,307. 6
1) The data drop that could swing the open: Q3 GDP (8:50 a.m. JST)
Japan’s first preliminary GDP for July–September lands minutes before the opening auction. A Reuters poll flagged the risk of Japan’s first contraction in six quarters amid tariff headwinds and soft exports; the median call was a −0.6% q/q (−2.5% annualized) setback. Watch the private consumption and net exports lines for read‑through to retailers and autos. 7
Why it matters: A weak print would underscore the case for fiscal support (see below) and could temper near‑term BOJ‑tightening bets; a surprise upside may support domestic cyclicals and banks into the morning session. 8
2) Policy watch: Stimulus sizing and the BOJ’s December review
- Fiscal: Finance Minister Satsuki Katayama signaled the coming stimulus package will exceed ¥17 trillion, with cabinet approval targeted for Nov 21. Expect AI and semiconductor investment among focal points. Fiscal momentum is a key pillar behind Japan’s 2025 equity rerating. 9
- Monetary: The BOJ next meets Dec 18–19. Governor Kazuo Ueda has reiterated the aim for moderate inflation backed by wage gains, while an adviser to PM Sanae Takaichi publicly argued against a December hike, preferring early‑2026. Markets will parse today’s GDP for clues. 10
- Balance sheet backdrop: This autumn the BOJ outlined a path to unwind ETF holdings over time—reducing a longstanding equity‑market backstop, even as rate policy stays steady for now. That’s a structural consideration for index‑level demand. 11
3) Yen watch: Intervention chatter and exporter math
Dollar/yen trades in the mid‑154s after last week’s declines in the dollar; officials have sharpened warnings against “one‑sided” FX moves. Strategists still flag the 160 area as a rough line where intervention risk rises if volatility spikes. Exporters (autos, tech hardware) are sensitive to every yen of move at the open. 3
4) Global lead‑ins: AI, oil, and rates
- Nvidia’s earnings (Nov 19, after U.S. close) will be a marquee catalyst for Tokyo Electron, Advantest, Screen, and other Japan chip‑equipment names. The Street is laser‑focused on data‑center demand and Blackwell ramp. 12
- Semis upstream: After months of strength, TSMC’s October sales growth slowed even as 2025 guidance remains buoyant—feeding debate about the pace of AI hardware demand into year‑end. 13
- Cross‑asset tone: A global risk wobble late last week (Fed‑cut odds tempered; “AI bubble” jitters) is the overnight context for Asia. MSCI Asia ex‑Japan saw heavy outflows in early November—positioning remains in focus. 14
- Oil: Brent’s slide toward the low‑$60s on oversupply narratives helps margins for energy‑intensive sectors and airlines, but weighs on upstream proxies. 5
5) Sectors and single‑stock themes for the open
- Banks: Japan’s megabanks just posted robust Q2 results and raised buybacks/forecasts—a steeper curve and policy normalization bias underpin the story. Presentations continue today (incl. MUFG and Aozora Bank), keeping the group in focus. 15
- Exporters/Autos: If GDP underscores external drag—and with tariff uncertainty lingering—auto names could stay headline‑sensitive. Currency moves at the open will drive the first prints. 16
- Tech hardware & equipment: Pre‑Nvidia positioning is likely to dominate flows. Any guidance hints from U.S. peers and TSMC datapoints remain the key tell for Tokyo’s AI complex. 12
- Energy users vs. producers: Lower crude is a relative tailwind for power, airlines, chemicals; upstream and trading‑linked names can lag when Brent weakens. 5
6) Levels and market micro
- Nikkei 225: Friday’s close at 50,377 keeps the index above 50,000 psychological support yet below late‑October’s 51,307 record; opening tone will hinge on whether GDP surprises and whether yen direction reverses Friday’s pressure. 6
- Trading hours:Opening auction: 9:00 a.m. JST; the GDP print at 8:50 can move pre‑open indications and auction imbalance data. 1
7) The week ahead (JST)
- Tue, Nov 18 (8:50):Trade balance (Oct)—exports vs. tariff drag under scrutiny. 17
- Fri, Nov 21 (8:30):National CPI (Oct)—a Reuters poll points to a ~3.0% core reading as energy subsidies fade. 18
- Fri, Nov 21:Flash PMIs—tests for services resilience vs. softer manufacturing. 19
- Fri, Nov 21: Cabinet decision expected on the stimulus package. 9
8) Pre‑open checklist
- GDP headline & components at 8:50 (consumption, net exports, capex). 16
- Dollar/yen direction into the auction; listen for any fresh MoF FX remarks. 20
- Banks: follow‑through on upgraded guidance/buybacks; watch today’s events diary. 15
- AI complex: positioning ahead of Nvidia (Nov 19, US); watch any U.S. tech headlines pre‑open. 12
- Oil & yields: Brent path and U.S. 10‑year—risk appetite and sector bias often take cues here. 5
