In the morning trading on the 12th, the following 3 points should be noted.

- After the selling spree, the market trend of solidity is expected.

- Rockfield, April 24th operating profit increased by 15.8% to 1.738 billion yen. Expected to increase by 17.5% to 2.042 billion yen on April 25th.

- Focus on Meiko, Kawasaki Heavy Industries, self-driving robots, and drilling machines for printed circuit boards in the morning.

- After the selling spree, the market trend of solidity is expected.

On the 12th, the Japanese stock market is likely to be in a stalemate. On the 11th, the US market saw the Dow Jones Industrial Average drop by 120 points and the Nasdaq rise by 151 points. Sellers adjusting their holdings became predominant in light of the announcement of May's US Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) announcement scheduled for the next day. On the other hand, a part of hightech stocks, such as Apple, were robust and the Nasdaq rose to a record high for several days in a row. Chicago Nikkei 225 futures fell 275 yen from Osaka to 38,905 yen. The yen exchange rate is hovering around 157 yen 10 sen per dollar.

Starting with a downward trend from alignment with the Chicago futures, it is likely to start off with selling dominance. Although there were scenes where the Nikkei 225 futures were sold down to 38,810 yen during the night session, they struggled to fall further because the 13-week line level was considered a support line, and closed at the 75-day line level. Although it has erased the previous day's gains, the market is expected to become increasingly solid after the selling spree. Therefore, although the Nikkei average stock price is expected to fall below the 75-day line that was exceeded the previous day, it is likely to have a solid footing around the 13-week line level.

In addition, Apple rose more than 7%. It was regarded as a material factor that the generated AI service Apple Intelligence was announced at the annual developer conference the previous day, but the large value of the index impact will support hightech stocks, and although there are no signs of a widespread trend, easy investment in AI-related sectors is expected. In addition, foreign securities firms are reportedly upgrading Softbank G <9984>. The company bought as high as 9929 yen on the 6th and is approaching the target of ¥10,000 recovery since May 2021. As it is also a large-cap stock with a significant impact on the index, it is likely to attract interest.

Furthermore, as the announcement of FOMC and CPI is forthcoming, the market is expected to be stagnant overall, making it difficult to enter into strategic selling. Therefore, there is also a possibility that short-term individual investors may turn to small and mid-cap stocks, which are unlikely to be affected by index trading. The growth 250 index, which has been in a weak tone, has reached the 25-day moving average, which is functioning as a resistance line, and is at a level that is likely to increase the likelihood of a rebound.

- Rockfield, April 24th operating profit increased by 15.8% to 1.738 billion yen. Expected to increase by 17.5% to 2.042 billion yen on April 25th.

Rockfield <2910> announced its financial results for the April 2024 period, with revenue increasing 2.8% from the previous year to 51.357 billion yen, and operating profit increasing 15.8% to 1.738 billion yen. By expanding the range of Christmas, year-end, and New Year's products that can be delivered to customers' homes and improving the convenience of the online shop, the company increased its reservation sales and exceeded its expected pace in increasing membership, with over 260 thousand members as of the end of April 2024. For the fiscal year ending April 2025, the company plans to achieve revenue of 53.467 billion yen, an increase of 4.1% from the previous year, and operating profit of 2.042 billion yen, an increase of 17.5% from the previous year.

Materials of concern in the morning session

- The Nikkei average rose (39134.79, +96.63) - The Nasdaq Composite Index rose (17343.55, +151.02) - The SOX index rose (5365.38, +2.98) - US crude oil futures rose (77.90, +0.16) - NY Dow fell (38747.42, -120.62) - $1 = 157.10-20 yen - Chicago Nikkei futures fell (38905, Osaka -275) - The VIX index rose (12.85, +0.11) - Domestic corporate price index (May) - Government bond purchase operation - BOJ business every ten days report (June 10th) - Regional Bank Association Chairman holds press conference - House of Councillors plenary session - Prime Minister Kishida visits Italy and Switzerland - China Consumer Price Index (May) - China Producer Price Index (May) - Bank of Thailand announces monetary policy - India Consumer Price Index (May) - Indian Mining and Industrial Production (April) - German Consumer Price Index (May)

- The Nasdaq Composite Index rose (17343.55, +151.02)

- The SOX index rose (5365.38, +2.98)

- US crude oil futures rose (77.90, +0.16)

Long-term US interest rates fell.

Expectations for inflation to ease in the US.

Request for improvement in corporate value by the Tokyo Stock Exchange.

- Meiko <6787>, Kawasaki Heavy Industries, self-driving robots, and drilling machines for printed circuit boards.

- Marubeni <8002> enters industrial park management in Vietnam, responding to the need for decentralization of bases.

- NTT <9432> new medical data company aims for 10 billion yen in sales in the FY 2029.

- Hitachi <6501> strengthens IoT infrastructure with generated AI, data center development and personnel training.

- Japan Zeon <4205> invests 70 billion yen in a highly functional resin factory in Yamaguchi.

- Daiwa Securities Group <8601> adds Aozora Bank stocks, fully owns the former Murakami family-owned series stocks for 28 billion yen.

- Marubeni <8002> strengthens its consumer product business through the acquisition of American consumables.

- Kyocera <6971> and DENSO verify lightweight photovoltaic power generation on the rooftop of Nishio Manufacturing.

- NEC <6701> demonstrates self-driving bus in Okinawa with Daiichi Koutsu, etc.

Takatori, Inc. President Makoto Masuda: "Increasing production in China"

NEC Corporation (6701) partners with NLJ to optimize logistics and streamline joint distribution.

SKY Perfect JSAT HD Inc. (9412) and NTT Docomo, Inc. collaborate to provide efficient 5G communication at a height of 4000 meters.

Mipox Corporation (5381) contributes to the development of continuous SiC wafer surface grinding and polishing equipment, and achieves 8-inch processing.

Nippon Electric Glass Co., Ltd. (5214) reduces cracks during processing of core substrates for semiconductors.

Mitsui Chemicals, Inc. (4183) has started mass production of CNTs used in photolithography, and has strengthened the Iwakuni Otake Plant.

Nippon Shokubai Co., Ltd. (4114) has obtained ISCC PLUS certification in Indonesia.

Kajima Corporation (1812) achieves the highest rank of WELL certification in Singapore.

Ishihara Sangyo Kaisha, Ltd. (4028) shifts to the chloride process for high-value-added products such as titanium dioxide.

☆ Schedule of events in the morning session

08:50 May Domestic Corporate Goods Price Index (YoY Forecast: +2.0%, April: +0.9%)

10:10 BOJ Notice of Government Bond Purchases

10:30 May Consumer Price Index in China (YoY Forecast: +0.4%, April: +0.3%)

10:30 May Producer Price Index in China (YoY Forecast: -1.5%, April: -2.5%)