Three points to pay attention to during the trading session 7 days ago.

Speculation by overseas investors targeting Japanese stocks for buying with the aim of the interest rate spread between Japan and the United States.

Yaskawa Electric Corp. has upwardly revised its net profit for this fiscal year to 64 billion yen and included gains from the sale of related company stocks.

Focus on the morning session: Shibaura Machinery develops electric injection molding machines tailored for India, capturing a 30% market share.

Speculation by overseas investors targeting Japanese stocks for buying with the aim of the interest rate spread between Japan and the United States.

In the Japanese stock market on the 7th, following the rise in US stocks, it is likely to start with a gap up. On the 4th, the US market saw the dow jones industrial average rise by 341 points, and the nasdaq by 219 points. In September, the US employment statistics showed an increase of 0.25 million 4000 non-farm payrolls compared to the previous month, significantly exceeding market expectations (an increase of around 0.15 million people). The end of port strikes like those on the US East Coast has led to a sense of buying comfort. The Chicago Nikkei 225 futures settlement price closed 1065 yen higher than Osaka at 39,625 yen. The yen exchange rate is trending around 148.90 yen to the dollar.

The Nikkei average stock price is expected to start with a gap up following the convergence with Chicago futures. Following the results of the US employment statistics, speculation about a significant rate cut at the next Federal Open Market Committee (FOMC) meeting has receded. Amid rising US long-term interest rates, the yen exchange rate has temporarily fluctuated to around 149 yen to the dollar in the foreign exchange market, making it easier for overseas investors targeting the Japan stock market for purchases with the expectation of narrowing the Japan-US interest rate spread.

In the morning, amid transactions related to indexes, the Nikkei average stock price fell by 1910 yen, surpassing the steep decline on September 30. In the foreign exchange market last week, the yen has exceeded the temporary weakening level in the trade market, and the level of 39,829.56 yen on September 27 is likely to be targeted in the stock market as well. While there may be a growing sense of deadlock after the initial buying spree, with considerable rises prompting buybacks from sellers and adjustments to buy leveraged ETFs, the desire to buy on pullbacks seems strong.

In terms of selection, the movement of high-tech stocks with significant index impact is attracting attention amid index-driven trading. Additionally, Fast Retailing <9983>, scheduled to announce earnings this week, recently broke its all-time high (adjusted for splits), suggesting a strengthening in buyback activity that is likely to push the Nikkei average higher. With a strengthening trend of a weaker yen, there is also a growing focus on selection towards export-related industries. However, due to caution surrounding geopolitical risks, there may be a tendency to hesitate to take strong positions, leading to a focus on short-term trading for price differentials.

Yaskawa Electric Corp. has upwardly revised its net profit for this fiscal year to 64 billion yen and included gains from the sale of related company stocks.

Yaskawa Electric <6506> announced a revision to its financial estimates for the fiscal year ending February 2025. The net profit was revised upward from 54 billion yen to 64 billion yen. Due to the slower-than-expected start of the semiconductor and electronic component market, as well as the weaker-than-expected recovery of the overall China market, it is expected that both sales revenue and operating profit will decrease from the previous forecast. On the other hand, the upward revision of net profit is due to the sale of related company investments and the recognition of valuation gains and losses.

Materials of concern in the morning session

・The Nikkei average is up (38,635.62, +83.56)

The dow jones industrial average is rising (42352.75, +341.16).

The nasdaq composite index is rising (18137.85, +219.37).

1 dollar = 149.00-10 yen.

Chicago nikkei futures are rising (39625, Osaka comparison +1065).

SOX index is rising (5206.84, +81.62).

VIX index is decreasing (19.21, -1.28).

US crude oil futures are rising (74.38, +0.67).

Expectations for inflation to ease in the US.

Active share buybacks

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

Shibaura Machinery <6104> develops electric injection molding machines to local specifications in India, capturing a 30% market share.

- Tamura Manufacturing Co., Ltd. <6768> increases transformer production in Brazil, constructing a new factory.

- Mitsubishi Electric Corp. <6503> and other electrical companies increase semiconductor laser production for DC, due to the expansion of demand for optical devices.

- Daiwa House Investment Trust Co., Ltd. <1878> collaborates with YKK AP for early detection of disease risks, forming an industry-crossing organization.

- Mitsubishi Heavy Industries <7011> names and launches its new submarine "Chougei".

- Seven & i Holdings <3382> considers selling shares of subsidiaries such as Yokado.

- Toyota Tsusho <8015> accelerates decarbonization investments, expanding to 2 trillion yen.

- Honda <7267> achieves top new car sales in the first half with the "N-BOX" maintaining its lead for the third consecutive year.

- Toyota Industries <7203> invests an additional 73 billion yen in U.S. Joby for the development of a flying car.

NTN <6472>with Kanden and PPA, reducing CO2 emissions by 589 tons per year at the Wakayama plant.

Shinto Kogyo <6339> consolidates weight measurement and box packing, launches robot system.

Star Seimitsu <7718> enters medical field, invests in two emerging medical device companies.

Asteria <3853> integrates no-code and low-code technologies with NTT Data Intra.

Suncall <5985> withdraws from HDD suspension market.

Nippon Steel <5401> initiates joint research project with marine organizations for microbiological corrosion risk diagnosis.

Toyo Construction <1890> achieves unmanned wave-dissipating block operation with remote control.

Kurita Industries <6370>'s Critac PFAS removal water purifier for commercial and household use.

- UBE <4208> to transfer management rights of Ube Steel to Marubeni group.

☆ Schedule of events in the morning session

Not applicable.

Not applicable.