In the morning trading on the 26th, the following three points are worth noting.

If Taimi is doing well, shift to small and mid-cap stocks.

Fujitsu turns its operating loss into a profit in the first quarter, amounting to 21.3 billion yen.

Topics in the morning session: Mitsubishi Electric, development of sensor technology, and capturing only designated areas.

If Taimi is doing well, shift to small and mid-cap stocks.

In the Japanese stock market on the 26th, even though they were aware of the self-regulated rebound against the sharp fall the previous day, there may be limited active trading. In the US market on the 25th, Dow Jones rose 81 dollars while Nasdaq fell 160 points. As GDP growth surpassed expectations, pessimistic views on the economy receded, and buybacks came first. However, since there is a pending announcement of the US Personal Consumption Expenditures (PCE) Core Price Index, which financial policymakers are watching, the rebound is limited. Chicago Nikkei 225 futures clearing price is 37,770 yen, 40 yen higher than Osaka. The yen exchange rate hovers around 153.90 yen per dollar.

It is expected to start with a slightly advanced buying trend from the Chicago futures. However, with the expectation of self-regulated rebound against the sharp fall the previous day, the announcement of the PCE core price index to come and the active trading being held back in light of a large-scale interim earnings report done at the moment, there will likely be subdued moves. If the slowness of the rebound is perceived, it may be easier for the supply-and-demand situation to attract rebound-waiting sales. The Nikkei average stock price fell all the way to the -2σ level of the Bollinger Band. It is more of an approach in expectation of a correction to the level where being oversold is easily perceived.

However, sentiments deteriorated with the short-term sharp fall. It is also a time when we want to judge the results of the Bank of Japan's monetary policy meeting and the Federal Open Market Committee (FOMC) next week. From the Bank of Japan’s policy normalization observation, the yen strengthened sharply yesterday, with selling for position adjustment due to the shrinking of the Japan-US interest rate differential holding majority. In case the yen exchange rate begins to swing back towards a yen rise again, intermittent index selling may come into focus as a possibility, which could lead to a development to watch in relation to the exchange rate.

Also, the Nikkei average stock price has come to be perceived to be around 36733 yen, the April low, as well as around 36656 yen where the 200-day line is positioned. Although self-regulated rebound is perceived, if the stalemate lasts at the previous day's closing level, it may become easier for selling aimed at holding-position adjustment to come. Individual response based on earnings reports, etc. is likely to be the focus of the day's selections. In addition, there is likely to be a lot of attention on Taimi <215A>, which listed today. If Taimi has a good start, individual-oriented trading is likely to shift to small and mid-cap stocks that are less likely to be swayed by the index.

Fujitsu turns its operating loss into a profit in the first quarter, amounting to 21.3 billion yen.

Fujitsu (6702) announced that its Q1 FY2025 performance ending in March 2025 recorded a sales revenue of JPY 830.03 billion, an increase of 3.8% YoY. The company recorded an operating profit of JPY 21.387 billion, compared to a loss of JPY 1.88 billion in the same period last year, surpassing the consensus estimate of around JPY 1.77 billion. The main IT business leveraging the DX demand remained robust, especially in Japan. For FY2025, the company has maintained its initial plan of recording sales revenue of JPY 3.76 trillion, up 0.1% YoY, and operating profit of JPY 330 billion, up 16.3% YoY.

Materials of concern in the morning session

NY Dow is up (39,935.07, +81.20).

1 dollar = 153.90-00 yen.

Chicago Nikkei futures are up (37,770, 40 higher than Osaka).

US crude oil futures are up (78.28, +0.69).

Long-term US interest rates fell.

Expectations for inflation to ease in the US.

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

Mitsubishi Electric <6503> sensor technology development, capturing only designated areas.

Nippon Sheet Glass <5202> will invest 10 billion yen in DX by 2030, integrating data worldwide.

Meibuki Financial Group <7167> Joyo Bank rebuilt the head office, set up a business/training center, and it is expected to be completed in 28 fiscal years.

Expected to be completed in FY28.

Sharp <6753> invested 4.6 billion yen in a refrigeration production joint venture in Egypt.

Tokyu Real Estate HD <3289> Shibuya Sakura Stage opens 37 stores in commercial areas.

- Itochu <8001> jointly operates waste power generation in Serbia with French infrastructure. - Hino Motors <7205> full-year profit and loss undetermined, investigation continues in the US due to certification fraud. - Isuzu Motors <7202> collaborates with US-based Cummins to introduce a new engine for medium-sized trucks. - Towa <6315> fully launched semiconductor molding equipment renovation in South Korea. - Yasukawa Electric <6506> released high-speed controllers, integrating with JTEKT-made PLC. - JFEHD <5411> Director Kawahara of the Urban Energy Group: prioritize the use of geothermal power. - Panasonic HD <6752> to launch integrated building material perovskite in 2026. - Sekisui Chemical <4204> strengthens its high-bond and easy-to-peel UV tape for advanced semiconductors. - Iwatani Industry <8088> reached an agreement to demonstrate a liquid hydrogen supply network in partnership with JFE and two other companies, for leasing a blast furnace site. - Mitsubishi Estate <8802> has significantly renewed the new Tokyo Building, emphasizing environmental considerations. - 8:30 July Tokyo metropolitan area consumer price core index (YoY forecast: +2.2%, June: +2.1%)

- Hino Motors <7205> has undetermined current profit and loss, and the investigation for certification fraud continues in the US.

- Isuzu Motors <7202> collaborates with US-based Cummins to introduce a new engine for medium-sized trucks.

- Towa <6315> has fully launched semiconductor molding equipment renovation in South Korea.

- Yasukawa Electric <6506> released high-speed controllers, integrating with JTEKT-made PLC.

- Director Kawahara of the Urban Energy Group in JFEHD <5411>: prioritize the use of geothermal power.

- Panasonic HD <6752> to launch integrated building material perovskite in 2026.

- Sekisui Chemical <4204> strengthens its high-bond and easy-to-peel UV tape for advanced semiconductors.

- Iwatani Industry <8088> reached an agreement to demonstrate a liquid hydrogen supply network in partnership with JFE and two other companies, for leasing a blast furnace site.

- Mitsubishi Estate <8802> has significantly renewed the new Tokyo Building, emphasizing environmental considerations.

☆ Schedule of events in the morning session

- 8:30 July Tokyo metropolitan area consumer price core index (YoY forecast: +2.2%, June: +2.1%)

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