In the morning trading on the 11th, the following three points deserve attention.

Anticipation is growing as we approach the 3-day weekend and the market situation becomes more tense.

■ First Retail, operating profit up 31.4% to 500.9 billion yen on 24/8, expected to increase by 5.8% to 530 billion yen on 25/8

Key points of the morning session: Tokai Rika, smart mold external sales, automatic adjustment of dimensional changes.

Anticipation is growing as we approach the 3-day weekend and the market situation becomes more tense.

The Japanese stock market on the 11th started with buying, but is likely to face a tightening market situation as we approach the 3-day weekend. On the 10th, the US market saw the dow jones industrial average down 57 points and the nasdaq down 9 points. The US Consumer Price Index (CPI) exceeded expectations, diminishing expectations of a Federal Reserve rate cut. In addition, the weekly initial jobless claims saw a significant increase due to the impact of a major hurricane, leading to a deterioration in economic outlook. The Chicago Nikkei 225 futures settlement value was 60 yen higher at 39,370 yen compared to Osaka. The yen was trading around 148.60 yen to the dollar.

The Nikkei Average is likely to see some buying following the Chicago futures, as profit-taking sales were dominant in response to employment indicators in the US. While there were opportunities for selling due to the US market reaching new highs the previous day, the impact of the impending 3-day weekend in the US suggests a trend towards position adjustments. Therefore, the impact of the US market decline is expected to be limited.

On the other hand, NVIDIA, Micron Technology, and other semiconductor stocks are being bought, with index-heavyweights like Advantest <6857> and Higashi Electronics <8035> expected to support the Nikkei Average. Furthermore, the results announced by Fast Retailing <9983> after the previous day's market close exceeded consensus expectations, potentially becoming a supportive factor.

However, as it is just before a 3-day weekend, active trading tends to be restrained and rebalancing is more common. There is also concern about the situation in the Middle East over the long weekend, making it difficult to hold positions across the break. Therefore, it seems likely that trading will remain focused on short-term profit-taking. It is believed that funds are more likely to flow into individual stocks with specific catalysts such as high-tech stock trends and earnings in terms of stock selection.

It should be noted that companies which reported earnings last night include First Retail, as well as UNEXT<9418>, ArcCore<3384>, Ooba<9765>, Konara<4176>, Daiko Tsusho<7673>, Chiyoda<8185>, Daikokuten<2791>, Koshidaka HD<2157>, Takeuchi Seisaku<6432>, Dawn<2303>, and Kojima<7513>, among others.

■ First Retail, operating profit up 31.4% to 500.9 billion yen on 24/8, expected to increase by 5.8% to 530 billion yen on 25/8

First Retail <9983> announced its financial results for the August 2024 period, with sales revenue increasing by 12.2% to 3.1038 trillion yen compared to the previous period, and operating profit increasing by 31.4% to 500.9 billion yen. Domestic UNIQLO business achieved increased sales revenue of 932.2 billion yen (up 4.7% from the previous period) and operating profit of 155.8 billion yen (32.2% increase), reaching record high revenue and significant profit growth. The financial results for the August 2025 period plan for sales revenue to increase by 9.5% to 3.4 trillion yen compared to the previous period, and operating profit to increase by 5.8% to 530 billion yen, exceeding consensus expectations.

Materials of concern in the morning session

- Nikkei Average is up (39,380.89, +102.93)

- Chicago Nikkei futures are up (39,370, Osaka comparison +60)

- US crude oil futures are up (75.85, +2.61)

Long-term US interest rates fell.

Expectations for inflation to ease in the US.

Active share buybacks

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

Tokai Rika Co., Ltd. <6995> launches smart molds for automatic adjustment of dimensional changes.

Yokoo <6800> enters smart clothing connectors market, with the first prototype.

NTT <9432> NTT Communications: IoT revenue in fiscal year 2027 is 250 billion yen, progressing with integration project with Docomo.

Nippon Paper Industries Co., Ltd. <3863> Executive Officer Takakazu Takahashi discusses unfamiliar fields with department heads.

Mitsubishi Motors <7211>, Mitsubishi Corporation and 4 other companies launched a new service to optimally control electric vehicle charging.

Marubeni <8002> invests in AI development support to boost software expansion.

Omron <6645> and other companies warn against fake online shopping sites, including Ambie, in response to the Consumer Affairs Agency's alert.

Mazda <7261> fully implements digital marketing to enhance customer touchpoints.

Mitsubishi Motors <7211> to significantly improve the "Outlander" PHV, set to be released on the 31st.

Yamaha <7951> to adopt in-car audio in Mitsubishi Motors' "Outlander" PHV.

NTT <9432>, NTT Communications provides remote support for XR glasses with 5G communication for maintenance and facility management.

Casio Computer <6952> introduces AI pet robots with 4 million unique personalities based on nurturing methods.

J Power <9513> to conduct business surveys with UBE and Mitsubishi Cement off the coast of the Malay Peninsula, aiming for CO2 storage by the end of 2030.

To support the emerging biochar industry, Toho Gas <9533> plans to open a mass production plant in Toyohashi, Aichi.

Mitsui Fudosan <8801>, Executive Officer Hiroshi Shinotsuka: "Enhancing logistics facilities."

☆ Schedule of events in the morning session

08:50 Money stock M3 for September (August: +0.9% year-on-year).

Not applicable.