Nikkei 225 for Friday , October 25, 2024

Prime Market Trading Value: 3.1579 trillion yen
Prime Market Trading Volume: 1.565 billion shares
Thin trading—prices are falling due to a lack of buying catalysts.

The highlight is the Nikkei Volatility Index (Nikkei VI), which surged to 32.14—a sharp rise, and that’s concerning.

Arbitrage stock positions stood at 760 million shares as of Wednesday the 23rd—still quite high.
There’s a possibility of a sharp liquidation following the election results on Friday the 27th, which could lead to a steep decline.

The sudden increase in arbitrage buy positions since mid-September was driven by expectations of Prime Minister Takaichi.
However, if Prime Minister Ishiba takes office, we might see a gradual reversal. The reversal could accelerate significantly during the general election for the House of Representatives.

As of October 18, margin buying positions also remain in the 4 trillion yen range, indicating unfavorable supply-demand conditions.
There are no signs of an increase in EPS or BPS either.

If Prime Minister Takaichi were to take office, Japanese stocks could rise even under these supply-demand conditions.
But otherwise, we might first see a drop, followed by a rebound once the supply-demand balance is cleared, leading to a range-bound market with alternating rises and falls.