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

■Trump trade continues, but caution smolders over tariffs.

■SoftBank, upward revision on 25/3, operating profit 950 billion yen←900 billion yen

■Focus on the morning session: Ban on continuous work for 14 days or more, consideration by the Ministry of Health, Labor and Welfare, possible revision to a maximum of 48 days.

■Trump trade continues, but caution smolders over tariffs.

On the 11th, the Japanese stock market is likely to develop into a tight market situation after starting with a selling lead. On the 8th, the US market saw the NY Dow rise by 259 points, and the Nasdaq rise by 17 points. Buying based on policy expectations from the Trump administration continued. Following the previous day's press conference by the Federal Open Market Committee (FOMC), Federal Reserve Board (FRB) Chairman Powell hinted at further interest rate cuts, and the Michigan Consumer Sentiment Index exceeded financial estimates, leading to a sense of reassurance. The Chicago Nikkei 225 futures settlement price closed 365 yen lower than Osaka at 39,135 yen. The yen is trading around 152.70 yen to the dollar.

The Nikkei Stock Average is likely to start with a dominant selling trend, following the Chicago futures. The Nikkei 225 futures briefly fell below the milestone of 39,000 yen in the night session. The 25-day moving average, which moves at the same level, is likely to be considered a support line. However, amidst peak earnings reports, the scope for aggressive rebound movements seems limited. Additionally, while the major 3 indices in the USA are hitting record highs simultaneously, weak price movements in semiconductor stocks are noticeable, and the SOX index is declining. There is a possibility that prominent stocks impacting the index, such as Advantest <6857> and Toyo Electric <8035>, may become burdens on the high-tech sector.

In the USA, the Trump trade continues, and the VIX index, at 14.94, indicates a state of heightened anxiety, having clearly dropped below the recognized 20.00 threshold, making it more favorable towards risk. However, movements cautious of significant tariffs by the Trump administration, like the weak price action in semiconductor stocks, are also observed. Moreover, the Nikkei Stock Average, at the November SQ end of the week, could not reach the SQ value (39,901.35 yen). Initially, while gauging the strength of the downside, it is likely to take a stance of buying on dips.

Market movements are likely to be based on individual responses using earnings as a clue, and among the companies that announced earnings after the end of trading on the 8th, focus is on Secom <9735>, Olympus <7733>, Tokyu <9005>, Keikyu <9006>, Mitsubishi Aluminum <5711>, Mitsui Mining <5706>, Toshiba Tec <6588>, Daifuku <6383>, Kaken Pharmaceutical <4521>, Kosan Fragrance <4914>, I-Style <3660>, ips <4390>, Nihon Electric <6951>, and more. Over 1,400 companies are announcing earnings this week, peaking on the 14th. Subsequently, institutions are likely to move more actively, and there may be a conscious shift towards reconsidering buying opportunities in significantly sold-off stocks.

Furthermore, a special parliamentary session will be convened today, holding an election to nominate the Prime Minister. It is expected that Shigeru Ishiba will be elected as the 103rd Prime Minister after a run-off vote. There may be interest in theme stocks such as regional revitalization due to policy expectations towards the Ishiba administration.

■SoftBank, upward revision on March 25th, operating profit 950 billion yen ← 900 billion yen

Softbank <9434> announced a revision of its financial estimates for the fiscal year ending March 2025. The revenue was revised upward from 6.2 trillion yen to 6.35 trillion yen, and the operating profit was revised from 900 billion yen to 950 billion yen. The strong performance of its subsidiary, the leading smart phone payment service PayPay, as well as the recovery of its mobile business, contributed to this.

Materials of concern in the morning session

・Nikkei average is up (39,500.37, +118.96)

・Dow Jones Industrial Average is up (43,988.99, +259.65)

・Nasdaq Composite Index is up (19,286.78, +17.32)

・The VIX index decreased (14.94, -0.26).

Long-term US interest rates fell.

Active share buybacks

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

・Working continuously for 14 days or more will be prohibited, Ministry of Health, Labour and Welfare to reconsider, maximum of 48 days possible.

・Political reform, call for discussions among all parties, 2nd Ishiba Cabinet to be launched tomorrow.

・Subsidies for introducing mobile toilets, kitchen cars, and disaster stockpiling items, government policy.

・Komeito demands thorough investigation of secret funds, party leader meeting, Prime Minister calls for discussions.

Biofuels, in new cars, target set by the Ministry of Economy, Trade and Industry in the 2030s.

☆ Schedule of events in the morning session

08:50 September current account balance (forecast: +3 trillion 552.3 billion yen, August: +3 trillion 803.6 billion yen).

08:50 Main opinions on BOJ monetary policy decisions (October 30-31).

Not applicable.