In the morning of the 19th, there are three points that deserve attention when it comes to trade.

Buy on pullbacks is likely to be targeted after the FOMC approval.

Saison Techno, 2Q downward revision: Operating profit 0.8 billion yen ← 0.9 billion yen

Morning focus material: Toho Gas, aluminum melting and holding by hydrogen combustion, burner development.

Buy on pullbacks is likely to be targeted after the FOMC approval.

In the Japanese stock market on the 19th, after starting with buying ahead, it is likely to become more stagnant, but the resilience is likely to be recognized. In the US market on the 18th, the NY Dow was down 103 points and the Nasdaq was down 54 points. The Federal Reserve of the United States (FRB) decided to cut interest rates by 0.5% at the Federal Open Market Committee (FOMC). Although there were scenes where it was significantly bought after the result was revealed, there were also proactive movements, and after that, there were more profit-taking sales after the event passed. Fed Chairman Powell pointed out in a post-meeting press conference that there is no need to rush for further rate cuts, and in the late afternoon, as interest rates rose, the stock market also weakened. The settlement price of Chicago Nikkei 225 futures was 36,370 yen, up 190 yen from Osaka. The exchange rate of the yen is fluctuating around 142.20 yen against the dollar.

The Nikkei average is likely to start with buying ahead as it converges with the Chicago futures. In the United States, there was a move to incorporate a significant interest rate cut at the moment, so profit-taking sales became dominant after the result was revealed. On the other hand, in the Tokyo market, there have been unstable price movements due to concerns about the narrowing of the interest rate gap between Japan and the United States, so there may be a sense of relief after the FOMC approval.

In addition, there were scenes of turmoil immediately after the FOMC results were revealed in the Nikkei 225 futures. However, as it did not fall below 36,000 yen, towards the end, there was a dominant move of short covering, and the trading ended at the high of the night session. Although it is unlikely to expect a strong rebound from the weak price movement of US semiconductor stocks, it should be easy to buy on pullbacks. Market attention will shift to the Bank of Japan's monetary policy meeting after the FOMC approval, but considering that the previous interest rate hike triggered turmoil, it is considered unlikely that there will be two consecutive interest rate hikes.

It is likely to continue to be a development to watch the exchange rate, but if there is a short-term selling movement to be wary of the Bank of Japan meeting, let's aim for a stance of rebound afterwards. In Lebanon, radio communication equipment, including radios, explode almost simultaneously day after day, and it seems that Japanese-made radios were used. Amid the increasing geopolitical risk, it is likely to be inclined towards defensive stocks as a target for investment. In addition, due to the demand and supply situation that is easily influenced by index buying and selling, individual investors are expected to be inclined towards small and mid-cap stocks.

Saison Techno, 2Q downward revision: Operating profit 0.8 billion yen ← 0.9 billion yen

Saison Techno <9640> has announced a revision to its forecast for the second quarter of the fiscal year ending March 2025. Sales are expected to be revised downward from 12.5 billion yen to 11.5 billion yen, and operating profit is expected to be revised downward from 0.9 billion yen to 0.8 billion yen. This is because some of the sales in the system development project in the distribution IT service business are expected to be delayed to the second half of the fiscal year, and it is expected to be lower than the previous forecast.

Materials of concern in the morning session

- The Nikkei average rose (36380.17, +176.95).

- 1 dollar = 141.90-00 yen.

- Chicago Nikkei futures rose (36,370, Osaka day shift +190).

USAInflationExpecting a calming period.

Active share buybacks

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

Tokyo Gas <9533> develops burners for melting and holding aluminum using hydrogen combustion.

Mitsubishi Corporation <8058> collaborates with KDDI and Lawson to demonstrate a "future convenience store".

Nippon Steel <5401> to undergo security review for acquisition of US Steel, approval to be considered by US government after presidential election.

Asahi Kasei <3407> to sell blood purification business to Integral for 56.5 billion yen.

Nippon Yusen <9101> considers ship recycling business with Ono Kaihatsu.

Sumitomo Bakelite <4203> partially sells shares as Sumitomo Chemical to Singapore government-owned entity.

- Toyota Tsusho <8015> partners with a US company for cyber security measures and promotes the development of systems for automobiles, agricultural machinery, and construction machinery.

- J-POWER <9513> supplies renewable energy in Miyagi to Tohoku Vehicle Industry Green Energy Association.

- DMG Mori Seiki <6141> holds a groundbreaking ceremony for its European headquarters, providing a venue for exhibitions, business negotiations, and international exchanges.

- NEC <6701> improves the reliability of LLM with new features to counteract "hallucinations".

- Cybertrust <4498> collaborates with Ephes Technologies in operating Linux OS.

- Kyocera <6971> establishes CVC for emerging markets in Europe and the Americas.

- Obayashi Construction <1801> develops barrier materials for underground water purification walls for long-term adsorption of PFAS.

- SUMCO <3436> collaborates with Saga University and National Institute of Advanced Industrial Science and Technology (AIST) to utilize AI in semiconductor wafer manufacturing.

- Chubu Electric Power <9502> Starts operation of agricultural solar power plant in Mie

- Tokai Carbon <5301> Growth with SiC wafers, promoting structural reform, urgent stoppage of graphite electrodes and S&L

- Haseko Corporation <1808> Opens new factory for precast in-floor panels in Ibaraki, manufacturing over 3,000 units per year

- Mitsui Fudosan <8801> New hotel opens in Ginza on the 30th, improving convenience for consecutive stays

- Tokyo Tatemono <8804> "Hilton Kyoto" opens, capturing tourism needs

- Kurita Industries <6370> Predicts decline in paper quality, analyzes water quality data

☆ Schedule of events in the morning session

- Bank of Japan monetary policy meeting (until the 20th)

- 07:45 NZ GDP preliminary value for Q2 (YoY forecast: -0.6%, Q1: +0.3%)

- 10:30 Australian unemployment rate for August (forecast: 4.2%, July: 4.2%)

- 10:30 Australian employment change for August (forecast: +0.026 million people, July: +0.0582 million people)