In the morning trade on the 27th, the following three points should be noted.

After the first round of purchases, individual responses based on accounting information.

Fujitsu turns its operating loss into a profit in the first quarter, amounting to 21.3 billion yen.

Morning Highlights: Kurimoto Iron Works, restructuring of iron pipe production, and integration of upstream processes at two locations.

After the first round of purchases, individual responses based on accounting information.

On the 29th, the Japanese stock market is expected to have a dominant buying trend due to the momentum of the US stock market. On the 26th of the US market, the NY Dow rose 654 dollars and the NASDAQ rose 176 points. 3M's earnings exceeded expectations, and buying increased due to expectations of interest rate cuts by the end of the year amid confirmation of a trend of inflation deceleration as the PCE price index remained within expectations. The Chicago Nikkei 225 futures clearing price was 38,235 yen, which was 545 yen higher than Osaka. The yen exchange rate is hovering around 153.80 yen per dollar.

It is expected to start with a buying trend followed by a backwardation in Chicago futures. Because it starts with a gap up, a self-sustaining rebound against last week's drop to the 37600 yen range is likely to be noticed. In the US on the 26th, high-tech stocks that were adjusting their positions at the foot were bought back, and in the Tokyo market, high-tech stocks that have a large impact on the index are expected to be reassessed. However, the Nikkei Average fell from its peak of 42,426 yen on the 11th to 37,611 yen in a short period of time, and the supply and demand situation is considered to be worsening.

It is thought that the selling pressure due to the narrowing of the yield spread between Japan and the US was dominant, and there is a possibility that the short positions have not piled up so much. Although there is a possibility that short covering will be noticed with the gap up, it is necessary to keep in mind that the level of autonomous rebound cannot be exceeded. Therefore, after one round of buying, it is likely that a stalemate feeling will gradually increase, and even if the trend of rebound strengthens, around the lower limit of the gap (38557 yen-39096 yen) that was opened during the sharp drop phase on the 25th, it is likely that there will be selling waiting for a return.

In addition, it is thought that aggressive trading is likely to be avoided as investors want to see the results of this week's monetary policies in Japan and the US, as well as the upcoming earnings of US high-tech companies. Trading focused on short-term price fluctuations will be the center of activity, and individual correspondence based on earnings will likely be promoted. Fujitsu Ltd.<6702>, which fell sharply due to the market last week, showed an increase of more than 10% from its earnings evaluation. For stocks that were sold off during this sudden drop, there is a possibility that there will be a movement to reposition them based on their earnings evaluation.

In addition, attention has been drawn to Keyence<6861>, Tatuta-sen<5809>, Nittoden<6988>, Environmental Management<4657>, Aichi<6345>, Nissei-sen<5659>, Screen HD<7735>, Monex G<8698>, Tōōka<4186>, Ōtsuka HD<4578>, and others, who announced their earnings at the end of last week.

Shin-Etsu Chemical reported a 0.1% increase in operating profit in the first quarter, totaling 191 billion yen.

The financial performance for the first quarter of the fiscal year ending March 2025, released by Shin-Etsu Chemical Co Ltd <4063>, showed that revenue decreased by 0.2% year-on-year to ¥597.93 billion, while operating profit increased 0.1% YoY to ¥191.023 billion. Both operating profit and recurring profit were almost the same as the same period last year. Input devices for automobiles have been steadily growing against the background of the recovery of the automobile industry, and sales have expanded even for silicone rollers for office equipment due to the expansion of orders for new products. The company plans to achieve revenue of ¥2.5 trillion, up 3.5% compared to the previous year, and operating profit of ¥735 billion, up 4.8% YoY, for the year ending March 2025.

Materials of concern in the morning session

- Dow Jones Industrial Average rose (40589.34, +654.27)

- Nasdaq Composite Index rose (17357.88, +176.16)

1 dollar = 153.70-80 yen.

- Chicago Nikkei Futures rose (38235, Osaka +545)

- SOX Index rose (5103.13, +97.77)

- VIX Index declined (16.39, -2.07)

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.

Kurimoto Iron Works<5602> is restructuring its iron pipe production and integrating upstream processes at two locations.

GS Yuasa<6674> plans to increase production capacity for rocket thermoelectric batteries by five times by the end of March 2029.

NTT<9432> has joined the international IOWN promotion group it established with Google.

Mitsubishi Heavy Industries<7011> is planning to increase production of aircraft parts in Vietnam, with an eye toward internal production.

Toyota Motor<7203> is expanding its supply network for electric vehicle batteries by establishing a battery plant in Fukuoka.

Toyota Motor<7203> will jointly plan operations with Daihatsu and exchange top-level and operational personnel.

SBI HD<8473> intends to provide virtual currencies in collaboration with a US asset management company.

Kitakanto<3865> aims to improve transportation efficiency by utilizing the railroad containers of Daio Paper to transport paper products.

Kawasaki Heavy Industries<7012> is conducting joint research with Kashima to use CO2 recovery technology in concrete manufacturing.

Asahi Group Holdings<2502> is fully withdrawing from the restaurant industry by selling Nada-Million.

Toyota Motor<7203> is promoting the use of liquid hydrogen fuel by developing infrastructure.

Yamaha Motor<7272> has developed a new mechanism for two-wheeled vehicles that does not require clutch operation.

Toyoda Gosei<7282> is investing in emerging artificial satellites to develop the space industry.

Yamazaki<6147> is exploring new customers by subcontracting manufacturing of semiconductor equipment and other components.

Blue Innovation<5597> is supplying spherical drones to shorten inspection time at power plants.

- Trusco Nakayama <9830> Establishes new logistics base in Niigata and Sanjo to prevent out-of-stock and improve instant delivery capabilities.

- A&D Holon HD <7745> group's A&D receives patent for its packaging inspection machine.

- NTT <9432> to demonstrate technology that generates virtual images from mirrors, without the need for VR goggles, as early as next fiscal year.

- Zine Electronics <6769> to establish technology for data transmission without the need of a digital signal processor by end of the year.

- Fujitsu <6702> starts development of a system to detect and analyze false information based on its sources.

- Zeidat <3841> joins TSMC alliance to automate semiconductor design.

- Dai Nippon Printing <7912> provides IT asset monitoring support and risk information and countermeasure reporting.

- Hiroshima Gas <9535> conducts collaborative research with academia and industry for green LPG generation.

☆ Schedule of events in the morning session

Not applicable.

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11:30 PM US July Dallas Fed Manufacturing Index (-14.2 expected, June: -15.1).