There are three points to focus on in the trading session on the 22nd.

Funds are shifting towards high-tech stocks.

■ Koei Tecmo, 2Q upwards revision Operating profit 10 billion yen <- 8 billion yen

Focus of the morning session: Mitsubishi HC Capital, aiming to increase domestic wind power five times to 1 million kW by the end of March 2032.

Funds are shifting towards high-tech stocks.

The Japanese stock market on the 22nd may have shown some weakness, but a resilient market development is likely to be perceived. The U.S. market on the 21st saw a 344-point drop in the NY Dow, while Nasdaq rose by 50 points. More than expected deterioration in the U.S. leading economic indicators for September, combined with long-term U.S. interest rates reaching high levels not seen since late July, led to profit-taking sales dominating. On the other hand, semiconductors like Nvidia and mobile devices like Apple were bought, lifting Nasdaq back into positive territory. The Chicago Nikkei 225 futures settlement price was 5 yen higher than Osaka at 39,025 yen. The yen is trading around 150.60 yen to the dollar.

The Nikkei average is likely to start calmly, following the lead of Chicago futures. While the decline in the NY Dow will be a burden, Nvidia has been hitting record highs with an increase of over 4%, and index impactful stocks like Advantest <6857> may become supporting factors for high-tech stocks. Moreover, amidst rising long-term U.S. interest rates, movements targeting the Japan-U.S. interest rate spread are likely to be noted, as well as in the foreign exchange market, with the yen trading in the mid-150s to the dollar, making searches for exports and more a likely focus.

On the other hand, yesterday saw noticeable weak movements in mega-banks, along with declines in stocks that had been bought due to policy expectations like Mitsubishi Heavy <7011>. Amidst the upcoming Lower House elections, there were movements of profit adjustments due to caution over political risks. If this trend continues, it is likely to lead to a shift in funds toward high-tech stocks. Sentiment also seems to be improving due to reactions from Disco <6146>'s earnings, so there may be conscious moves to buy back the stunk high-tech stocks ahead of earnings.

The Nikkei Stock Average has been in a deadlock around 39,000 yen recently. There have been moments in the Nikkei 225 futures night session where it has been sold down to 38,750 yen temporarily, and it is considered easy for short-term selling movements led by futures to enter. However, as earnings reports intensify, and with caution towards active trading ahead of the Lower House election, it is expected that there will be a stance towards targeting dip-buying opportunities in situations where short-term selling occurs, anticipating a rebound afterwards. Elsewhere, attention is likely to be focused on companies related to earnings such as Nanyo<7417>, Care 21<2373>, and Koei Tecmo<3635> who announced their earnings last night.

■ Koei Tecmo, 2Q upwards revision Operating profit 10 billion yen <- 8 billion yen

Koei Tecmo <3635> announced a revision of the financial estimates for the second quarter of the fiscal year ending March 2023. The operating profit was revised upward from 8 billion yen to 10 billion yen. While existing titles were the main focus, revenue from repeat sales of packaged games and smart phone games increased compared to the plan, and costs decreased.

Materials of concern in the morning session

・Nasdaq Composite Index rises (18540.01, +50.45)

・1 Dollar = 150.70-80 Yen

・Chicago Nikkei futures rise (39025, Osaka comparison +5)

・SOX Index rises (5215.21, +6.60)

Crude oil futures in the USA are rising (70.56, +1.34)

Expectations for inflation to ease in the US.

Active share buybacks

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

Mitsubishi HC Capital <8593> plans to increase domestic wind power capacity by 5 times to 1 million kW by the end of March 2032

Nikon <7731> to establish 3 drug discovery support bases in Europe, tripling contracted projects next fiscal year

Shimadzu Corporation <7701> collaborates with Persol Tempstaff to foster technicians for mass spectrometry equipment, and dispatch them

Shimizu Corporation <1803> unveils wooden hybrid building with the largest wood usage in Japan

- Osaka Gas <9532> to conduct EV rechargeable battery degradation diagnosis using company vehicles to build a model

- Nagase Industry <8012> to establish a new company with ATEX, producing electric vehicle components in Mexico

- Kawasaki Kisen <9107> partners with Sumitomo Corporation, etc. to commence CO2 storage in Alaska, USA for business feasibility study

- NOK <7240> to start operation of new plant in India for car seal products next year

- Toyoda Gosei <7282> to double recycled rubber content, increasing to 20% in new materials

- FUJI <6134> to expand base in South China, enhancing proposal capabilities for automation

- Okamoto Machinery <6125> to aggressively promote semiconductor equipment domestically and internationally, establishing a showroom in Saitama

- Toyo Kanetsu <6369> acquires Sakata Denshi, specializing in civil engineering measurement, by March next year

NEC <6701> supports Level 4 autonomous driving in Hitachi City, Ibaraki Prefecture, conducting communication verification.

Rakuten G <4755> Rakuten Mobile exceeds 8 million contracts, gaining momentum in contract growth.

Panasonic HD <6752> President Yuki Kusumi feels positive about window power generation.

Mitsui E&S <7003> introduces hydrogen fuel for cargo handling operations with Tokyo Port Authority, promoting decarbonization at Tokyo Port.

Teijin <3401> develops a new construction method by strongly bonding wooden pillars and beams with Maeda Construction.

Chubu Electric Power <9502> signs agreement with INPEX subsidiary for CO2 storage in Australia.

Kobe Steel <5406> receives order for direct reduced iron plant from German steelmaker.

Mitsubishi Estate <8802> establishes logistic facilities in Vietnam to meet high functional demand.

Sumitomo Metal Mining Co., Ltd. President Nobuhiro Matsumoto expands the functional materials business.

☆ Schedule of events in the morning session

Not applicable.

Not applicable.