In the morning session of the 20th trading day, there are three points to pay attention to as follows.

Before the Bank of Japan's results are announced, there is a strengthening movement of share buyback.

■ SANKYO, 2Q earnings estimate: operating profit 35 billion yen

Morning focus materials: Hitachi Construction Machinery, mass production of ultra-large shovels in Indonesia, strong demand for mining.

Before the Bank of Japan's results are announced, there is a strengthening movement of share buyback.

The Japanese stock market on the 20th may see some stagnation after starting with a buying trend, but the willingness to buy on the dips is likely to be noticeable. On the 19th, in the U.S. market, the NY Dow was up 522 points and the nasdaq rose by 440 points. The Federal Reserve Board (FRB) decided on a 0.5% rate cut at the Federal Open Market Committee (FOMC) meeting open until the 18th. Anticipatory movements were strong, so yesterday saw profit-taking sales prevailing, but the significant rate cut once again raised expectations for a soft landing.

Furthermore, the number of initial jobless claims reached its lowest level in 4 months, easing concerns about the labor market slowdown. Chicago Nikkei 225 futures settlement price was 37,530 yen, up 640 yen from Osaka. The yen is trading around 142.50 yen to the dollar.

The Nikkei Stock Average is expected to start with buying after aligning with Chicago futures. In the night session, Nikkei 225 futures were trading around 37,200 yen on the 25th, broke through the 200-day moving average, and were briefly bought up to 37,700 yen. This will lead to concentrated buying related to the index in the morning, so the Nikkei Stock Average is likely to break through the 25-day and 200-day moving averages. Around 38,310 yen where the 75-day moving average is positioned is also being considered as the next target. Moreover, it seems to be heading towards a sentiment aimed at filling the gap left during the decline on the 4th (38,080 yen - 38,581 yen).

Although active buying and selling is likely to be restrained due to the upcoming 3-day weekend, the possibility of a consecutive interest rate hike in the Bank of Japan's monetary policy meeting is low due to the previous rate hike triggering turmoil. It is expected that there will be a strengthening of the selling pressure from the early stages as the market becomes aware of the post-results adjustment. Therefore, there is a potential for an increase in short covering in the futures market, which is expected to lead to an inflow of funds into high-impact stocks such as technology stocks.

In a situation where the stalemate feeling strengthens due to waiting for the Bank of Japan's meeting after a round of buying, it is expected to move towards a stance of targeting pullbacks. It is believed that the Nikkei average stock price will break through the 25-day and 200-day moving averages after rising with a gap, but if both lines function as support lines in the deadlock, it is likely to brighten sentiment. In addition, yesterday, the growth 250 rose more than 3%. In a scenario where the 200-day moving average, which is being consciously regarded as a resistance line, is anticipated, there is likely to be active small-cap stock hunting by individual investors.

■ SANKYO, 2Q earnings estimate: operating profit 35 billion yen

SANKYO <6417> announced its previously undisclosed second quarter earnings forecast. The revenue is expected to decrease by 22.5% to 90 billion yen compared to the same period last year, and the operating profit is expected to decrease by 23% to 35 billion yen. Regarding dividends, it is planned to be 40 yen per share.

Materials of concern in the morning session

・The Nikkei average stock price is up (37,155.33, +775.16)

・The NY Dow Jones Industrial Average is up (42,025.19, +522.09)

・The NASDAQ Composite Index is up (18,013.98, +440.68)

- 1 dollar = 142.50-60 yen

- Chicago Nikkei futures are rising (37530, Osaka day comparison +640)

- SOX index is rising (5066.65, +207.36)

- VIX index is falling (16.33, -1.90)

- US crude oil futures are rising (71.95, +1.04)

USAInflationExpecting a calming period.

Active share buybacks

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

- Hitachi Construction Machinery <6305> Mass production of ultra-large shovels in Indonesia, strong demand for mines.

- Dai Nippon Printing <7912> plans to establish a juvenile rearing factory for aquaculture feed, with an annual output of 1,200 tons of powder by fiscal year 2028.

- Seiko Epson <6724> acquires US-based Firefly, expanding its digital printing business.

- Orix <8591> signs a power purchase agreement (PPA) with Google, supplying 0.037 million kW.

- Murata Manufacturing <6981> develops the world's smallest MLCC, aiming for adoption in smartphones.

- Sumitomo Corporation <8053> obtains approval for the basic design of the first ammonia supply ship in the USA.

- Keio Corporation <9008> subsidiary delivers 1,786 improperly manufactured axles due to tampering with press-in work data.

- JR East Japan <9020> 72 trains on the Tohoku Shinkansen suspended due to disconnections, affecting 0.045 million people.

- Toyota Synthetic <7282> opens new factory in India for production of airbags and interior/exterior components.

- Mazda <7261> Executive Officer and CTO Hirose advances internal combustion engine and electrification technology.

- Sumitomo Riko <5191> applies heat-insulating paint to molds of domestic affiliated companies.

- Hitachi Construction Machinery <6305> strengthens maintenance and service by establishing mining machinery sales company in Brazil with Marubeni.

- Kubota <6326> conducts research on solid adsorbents for zeolite raw materials in collaboration with the University of Tokyo.

- NEC <6701> receives a 1.8 billion yen order for kiosk terminals for pre-registration of immigration information.

- Mitsubishi Electric <6503> receives order for air conditioning system for new type of railway vehicles in Germany.

- Nomura Research Institute <4307> adds dedicated plan for NRI Secure, its cyber security infrastructure.

- Sumie Orimono <3501>: Expanding automotive interiors, increasing synthetic leather production in Mexico.

- Sumitomo Osaka Cement <5232>: Reducing CO2 emissions from semi-flexible pavement, utilizing artificial limestone.

- JFE Systems <4832>: Improving maintenance in virtual spaces, introducing Cognite products.

☆ Schedule of events in the morning session

Bank of Japan concludes its financial policy meeting.

- 08:30 National Consumer Price Index (excluding fresh food) for August (YoY estimate: +2.8%, July: +2.7%).

- 10:00 China's 1-year loan Prime Rate (currently 3.35%).