In the morning of the 14th trading day, we want to focus on the following three points.
- Buy dips for high-tech stocks.
- Taisei Corporation: 24/4 operating profit increased by 33.9% to 13 billion yen and 25/4 estimated 8.7% increase to 14.1 billion yen.
- Focus of the morning: Honda, Mitsubishi Corporation and a new company established in Tokyo next month to utilize EV batteries.
- Buy dips for high-tech stocks.
In the Japanese stock market on the 14th, a stable market development is likely to be emphasized after the selling wave. On the 13th, the US market saw the NY Dow down 65 dollars and Nasdaq up 59 points. May's US Wholesale Price Index (PPI) was lower than expected, and the observation of rate cuts by the Federal Reserve Board (FRB) this year has increased due to an increase in new unemployment claims, causing the long-term US interest rates to fall. On the other hand, due to concerns about a slowdown in the US economy, stocks sensitive to the economy were sold, and the NY Dow continued to fall. Broadcom was bought amid good earnings, and buying spread to a corner of semiconductor stocks, leading to a new record high for the Nasdaq index for consecutive days. Chicago Nikkei 225 futures are down 140 yen from Osaka at 38,580 yen. The exchange rate is at around 157 yen per dollar.
It is expected to start with a slightly sales-driven focus, which originated from the selling against Chicago futures. In the night session, the Nikkei 225 futures were sold down to 38,380 yen at one point, breaking through the 25-day moving average of 38,690 yen. Yesterday's Nikkei average rose to around 39,250 yen in the morning, then softened, and was sold down to the 25-day line. While the line is likely to be in conflict with the sense of strength and weakness, following the upward trend in US high-tech stocks, buy dips for selling is likely to be emphasized after the selling round.
Also, aggressive trading is likely to be subdued in the morning as the results of the Bank of Japan's monetary policy meeting today are announced. BOJ policy rates are expected to remain unchanged, and attention is focused on how to reduce and timing of purchases of government bonds. Although there is a possibility of a significant change in the afternoon after the results of the decision meeting are known, the market is likely to see results that are generally anticipated. Limited advanced movement also suggests that there might be a relief movement after the results are known.
It is expected to be affected by business related to the special clearing index (SQ) of the June futures and options market in the morning. However, as the Nikkei 225 futures have generally been in a range around 38,500 yen, a turbulent development is unlikely. After SQ has passed, there is a possibility that the demand and supply will become lighter, and investors are likely to head for buy dips for high-tech stocks.
Taisei Corporation: 24/4 operating profit increased by 33.9% to 13 billion yen and 25/4 estimated 8.7% increase to 14.1 billion yen.
The operating results for the year ending April 2024 announced by Toho Construction Co, Ltd. (1766) showed a revenue of JPY 340,835 million, which was a YoY increase of 7.6%, while operating profit increased by 33.9% to JPY 13,037 million. In the real estate rental business, revenue was able to exceed the previous fiscal year, due to an increase in the number of managed properties and an increase in rental income and management fees from tenants through the sublease management agency system (bulk lease system). In the construction business, completion construction amount increased compared to the previous year due to an increase in order received in the previous fiscal year. For the year ending April 2025, the company plans to achieve JPY 360,478 million in revenue, a YoY increase of 5.8%, and an operating profit of JPY 14,170 million, a YoY increase of 8.7%.
Materials of concern in the morning session
- Nasdaq composite index rose (17667.56, +59.12)
- SOX index rose (5602.42, +81.55)
- VIX index decreased (11.94, -0.10)
1 dollar is equivalent to 157.00-10 yen.
- US crude oil futures rose (78.62, +0.12)
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.
- Honda <7267> and Mitsubishi Corporation jointly set up a new company to utilize EV batteries in Tokyo next month.
- NTT DATA G <9613> partnered with Denso for integrated car software development.
- Toray Industries International recycles waste and uses it for umbrella materials and creates a new brand.
- LINE Yahoo <4689> domestic service for LINE Pay will end in April next year.
- Sony Group Corp <6758> will acquire a US movie theater operation to strengthen entertainment.
- Honda <7267> will launch a light commercial EV in October and is looking to recover through electrification.
Isuzu launches a new SUV in Thailand, with significant improvements to interior and exterior design.
Katoh Seisakusho releases a hydraulic shovel compliant with European regulations, providing improved fuel efficiency and reduced noise levels.
Mitsubishi Electric develops a method of laminating magnesium alloys to improve workability, in cooperation with JAXA and others.
NEC and Toray Industries collaborate to create an AI system for technical information management that enhances upstream design capabilities.
Hitachi Energy invests 700 billion yen to bolster its transformer business and construct a new plant in Sweden.
Shimizu Corporation and Nagoya Institute of Technology discover and isolate microorganisms to purify soil and groundwater at a coastal site.
Obayashi Corporation and Arc Information Systems conduct high-precision evaluations of liquefied ground and analyze the behavior of surrounding structures.
JX Metals, part of the ENEOS Holdings group, initiates a tender offer to acquire all shares of Tatsuta Electric Wire and make it a wholly-owned subsidiary.
Ishihara Sangyo Kaisha expands its research and development of agrochemical production technology with a new base in Hyogo.
☆ Schedule of events in the morning session
Bank of Japan concludes its financial policy meeting.
Not applicable.