[Summary] (Reading time approximately 6 minutes)
The Japanese market is currently in a difficult situation with geopolitical risks, high crude oil prices, rising interest rates, and a weak yen all occurring at the same time. In particular, the recent ``triple sell-off'' (low stock prices, low bond prices, and weak yen) has occurred, and the market has begun to price in a rise in the risk premium for Japanese assets as a whole. The current depreciation of the yen is not a tailwind for exports, but more like a "bad depreciation" that brings with it an increase in import costs. As a result, costs will increase for companies, real incomes will decrease for households, and expectations for interest rate hikes will increase, putting downward pressure on stock valuations. In the short term, reversal selling prevails, while in the medium term, crude oil and Bank of Japan policy are the keys. We are now in a phase where we are choosing stocks based on their "earnings resistance" rather than based on indexes.
Introduction
The Japanese market is clearly becoming heavier.
Recently, stock prices, bonds, and the yen have been declining simultaneously. The so-called "triple sell-off" occurred.
This is not just an adjustment.
A sign that the market structure itself is beginning to change.
What's happening?
The essence of this time is these four points.
Key point Key point Key point Key point
This combination is quite disadvantageous for Japan.
Because Japan is
Energy importing country × low growth × dependence on low interest rates
Because it has this structure.
“Good yen depreciation” and “bad yen depreciation”
This is the core of this time.
Normal yen depreciation is
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It is said that
But this time it's different.
- Accompanied by high crude oil prices Key point Key point
In other words,
“Cost-increasing yen depreciation” = bad yen depreciation
It has become.
Why does the triple selloff occur?
The flow is simple.
- Geopolitical risk → Rise in crude oil
- Rise in crude oil → inflationary pressure
- Inflation → interest rate rise
- Interest rate rise → stock price fall
- Selling yen at the same time → depreciating yen
As a result,
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occur at the same time.
Impact by sector
In this situation, not everything will go down.
In fact, the difference widens.
Fields of relative strength
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The characteristics are common.
Strong against interest rate rises or inflation
Relatively weak areas
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The reason is clear.
Vulnerable to cost increases or interest rate increases
Why are stocks as a whole so heavy?
The issue this time is not individual but ``the whole''.
The market is now
We are re-evaluating the risks of the Japanese market itself.
Specifically,
Key point Key point Key point
This combination is
Depresses the stock's valuation multiple (PER).
Next 3-6 months
The short term is quite severe.
Key point→ Decrease in valuation Key point→ Pressure on profits Key point→ Weakening domestic demand
As a result,
Stage where reversal sales are likely to occur.
Even if it goes up, it's hard to sustain.
Focus for the next 9-12 months
There are two keys.
Key point Key point
These two things will make a big difference in the market.
Scenario analysis
Base case (50%) Crude oil prices will gradually stabilize. After adjusting the stock, move on to sorting.
Bare case (30%) High crude oil prices, weak yen, and rising interest rates continue. The index is pushed further down.
Bull case (20%) Geopolitical risks recede. Stock prices rebound due to the fall in crude oil.
Key points for investment decisions
Five things are important in this situation.
Conditions for a strong company
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Companies to watch out for
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The core from an investment perspective
This is the current market.
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In other words,
A market where returns vary greatly depending on “what you buy”
Summary
This market is not unique.
Rather, it's a typical stress situation.
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When these four things overlap,
It is natural for the market to be weak.
Stance is important.
Buy it because it's cheap → NG Choose a company that can withstand → OK
Now,
“Selection market price”
This is the stage where you don't rush and wait for the conditions to be right.