In the trading session of eight days ago, three points should be focused on.

■Determine the resilience of tech stocks after selling subsides.

■LightOn reported a first quarter operating loss, reducing the deficit by ▲0.472 billion yen.

■Key material for the morning session: Kyocera Corporation Sponsored ADR plans to mass-produce a new electronic mirror next year, enhancing clarity for rear in-vehicle cameras.

■Determine the resilience of tech stocks after selling subsides.

On the 8th, the Japanese stock market is likely to see profit-taking moves in response to the significant rise of the previous day. In the U.S. market on the 7th, the Dow Jones Industrial Average fell by 178 points, and the Nasdaq dropped by 375 points. The JOLTS job openings for November 2024 and the ISM non-manufacturing index for December exceeded expectations, leading to heightened inflation concerns and increased speculation regarding a slowdown in interest rate cuts by the Federal Reserve, which weighed on the market as U.S. long-term interest rates rose. The Chicago Nikkei 225 futures are down 265 yen compared to Osaka at 39,735 yen. The yen is trading around 158 yen per dollar.

The Nikkei average is expected to start with selling pressure reflecting Chicago futures. In the U.S., the drop of NVIDIA is notable, and selling is anticipated for key tech stocks, like Tokyo Electron and Advantest, which had a significant impact on the index that previously led the Nikkei average. However, the Nikkei average rose to 40,288.80 yen at one point the previous day, surpassing the +2σ of the Bollinger Bands located around 40,215 yen. In the short term, the market may feel overheated, making profit-taking more likely.

First, while determining the impact of NVIDIA's decline, a stance targeting a correction around 39,730 yen, where the +1σ of the Bollinger Bands is located, seems likely. Additionally, buying aimed at dips is expected as the market approaches the critical 39,500 yen level. However, inflation concerns have increased due to economic indicators exceeding expectations in the U.S., and on the 8th, the ADP employment report for December and the Federal Open Market Committee meeting minutes are scheduled. With the December employment statistics approaching over the weekend, further price increases may be approached cautiously.

In terms of selection, it is easier to lean towards dividend-oriented investments while assessing the firmness of high-tech stocks after the selling has run its course. Furthermore, AI-related stocks are likely to continue attracting attention, and during the phase when profit-taking strengthens due to the decline of NVIDIA, a dip may be targeted. Additionally, it seems that funds aimed at short-term price fluctuations will concentrate on individual stocks with specific catalysts.

■LightOn reported a first quarter operating loss, reducing the deficit by ▲0.472 billion yen.

Lighton <7445> announced that for the first quarter of the fiscal year ending August 2025, revenue decreased by 24.7% year-on-year to 7.755 billion yen, and the operating loss was 0.472 billion yen (compared to a loss of 0.517 billion yen in the same period last year). Both the company's e-commerce and external malls struggled, with e-commerce revenue, including store pickups, falling below the previous year's results. In terms of profits, while revenue and gross profit significantly decreased, the operating loss narrowed compared to the same quarter last year due to improvements in the gross profit margin based on mid-term management plans and substantial reductions in selling, general, and administrative expenses.

■ Key materials for the first half of the trading session

・ The Nikkei Average rises (40083.30, +776.25)

・ US crude oil futures rise (74.25, +0.69)

• 1 dollar = 158.00-10 yen

Active share buybacks

• The Tokyo Stock Exchange's request for corporate value enhancement

Kyocera Corporation Sponsored ADR will begin mass production of the new electronic mirror next year, providing clarity for rear-facing onboard cameras.

Toyota will open Woven City this autumn, with Chairman Toyoda welcoming friends from around the world.

Sony Group Corp and Honda Mobility have started reservations for a new EV priced at 14 million yen, with deliveries set for mid-next year.

Panasonic Holdings Corporation is expanding its DC power supply for North America, aiming for revenue of 250 billion yen by fiscal year 2030.

Toyota is partnering with NVIDIA to supply advanced semiconductors, supporting the development of self-driving cars.

Toyota's subsidiary is investing 7 billion yen in a startup focused on rocket development, supporting mass production in the space sector.

Marubeni Corporation has invested 0.79 billion yen in a UK company specializing in lithium battery recycling.

・Hoshizaki <6465> acquires US business, strengthening direct sales of ice-making and refrigeration equipment.

・Kawasaki Heavy Industries <7012> to mass-produce new electric handles for construction machinery at 0.1 million units per year.

・Shibaura Machine <6104> invests in a US startup, exploring entry into battery electrode manufacturing equipment.

・Alps Alpine <6770> develops variable feel switches, allowing free adjustment of 'press sensation'.

・Sekisui Plastics <4212> starts delivery of electrical infrastructure products, expanding sales of outdoor steel structures.

・Mitsubishi Chemical Holdings <4188> halts construction of US MMA plant due to soaring investment costs.

・Pacific Cement <5233> acquires plants for aggregates and ready-mixed concrete in the USA.

・Sumitomo Metal Mining <5713> completely subsidiary of nickel refining system in the Philippines.

☆ Morning event schedule

< Domestic >

・ Nothing special

・09:30 Australia November Consumer Price Index (Financial Estimates: +2.2% year-on-year, October: +2.1%)