Tokyo Market Summary: Nikkei Average rebound exchange rate forecast revised to depreciation of yen, 1 dollar = 131.96 yen 60 companies including Nissan

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●The Nikkei Average ended at 33172.22 yen, 412.99 yen higher than the previous business day
● Exchange rate forecast revised to yen depreciation, 1 dollar = 131.96 yen 60 companies including Nissan
● Bank of Japan announces temporary government bond purchase operation of 300 billion yen in 5-10 years
● Daiichi Sankyo - buy and sell intersecting full-year forecasts remain unchanged even with a 28% increase in 1Q operating profit
● MOL - negative reversal of full-year final profit on the back market was revised upward, but material was exhausted
● Mitsubishi UFJ has gone back and forth, and is cautious about chasing higher prices of bank stocks due to the Bank of Japan temporary operation notice ◇
● Notable stocks: $Daiichi Sankyo (4568.JP)$、 $Mitsui O.S.K. Lines (9104.JP)$、 $Ono Pharmaceutical (4528.JP)$、 $KDDI (9433.JP)$、 $Toyota Motor (7203.JP)$etc
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Market Overview
The Nikkei Stock Average ended at 33172.22 yen, 412.99 yen higher than the previous business day in the Tokyo stock market today, and the Tokyo Stock Price Index (TOPIX) ended at 2322.56, 31.95 points higher.

Top news
Exchange rate forecast revised to depreciation of yen, 1 dollar = 131.96 yen 60 companies including Nissan
Japanese companies are reviewing their exchange rate forecasts for fiscal 2023 in the direction of depreciation of the yen. The average estimated dollar to yen rate of the 60 major companies was 1 dollar = 131.96 yen, which was revised from 129.39 yen 3 months ago to a depreciation of 2.57 yen. $Nissan Motor (7201.JP)$Ya $Canon (7751.JP)$etc. have changed, and earnings revisions associated with expected rate changes are also conspicuous. Price movements in exchange rates are limited even after the Bank of Japan's policy revisions, but they are wary of future appreciation of the yen due to interest rate cuts in Europe and the US, etc., and corporate exchange rate forecasts remain higher than the actual rate of yen.

Bank of Japan announces temporary government bond purchase operation for 300 billion yen in 5-10 years
The Bank of Japan notified a temporary government bond purchase operation (open market operation) on the 31st. The target is the remaining period of “5 to 10 years or less,” and the purchase amount is 300 billion yen. Since the Bank of Japan effectively raised the upper limit of long-term interest rates to 1% at the monetary policy meeting on the 28th, new 10-year government bond yields skyrocketed in the domestic bond market on the 31st. There seems to be an aim to fight back market movements by carrying out temporary buying operations.

Industrial production rose 2.0% in June and improved for the first time in 2 months
The preliminary value of the industrial production index (2020 = 100, seasonally adjusted) for June announced by the Ministry of Economy, Trade and Industry on the 31st was 105.3, up 2.0% from the previous month. The increase was the first time in 2 months. The electronic component/device industry and the automobile industry took the lead. The keynote judgment for production was unchanged from May and was maintained with a “gradual pick-up movement.” It is expected that companies' production plans will rise from now on.

Notable stocks
Daiichi Sankyo - buying and selling intersecting 1Q operating profit increased 28%, but full-year forecasts remained unchanged
$Daiichi Sankyo (4568.JP)$There is a mix of buying and selling. The company announced at 13:00 on the 31st that consolidated operating profit (IFRS) for the 24.3rd fiscal year 1Q (April-6 months) was 44.03 billion yen (up 28.1% from the same period last year). The market consensus was 42.68 billion yen. The impact of the increase in exchange rate sales due to growth in global staples such as Enharts, Rixiana, etc., and the depreciation of the yen contributed. The full-year forecast was left unchanged at 135 billion yen. The market consensus was 164.5 billion yen.

MOL - negative reversal of full-year final profit upward also ran out of material
$Mitsui O.S.K. Lines (9104.JP)$There was a negative reversal in the back. The company announced at 12:00 on the 31st that it would revise its consolidated net profit forecast for the full fiscal year 24.3 upward from 210 billion yen to 215 billion yen (down 73.0% from the previous fiscal year). The estimated exchange rate was revised from 125.59 yen per US dollar at the beginning of the fiscal year to 130.00 yen. The market consensus is 207 billion yen. Consolidated net profit for the 24.3 fiscal year 1Q (April-6 months) was 91.2 billion yen (down 68.1% from the same period last year). The fact that OCEAN NETWORK EXPRESS, which is a container-ship equity law applied company, received a reaction from high fare levels due to the COVID-19 pandemic resonated.

Ono Pharmaceutical Co., Ltd. - Negative Backstage: An 8% increase in operating profit in the 1st quarter also falls short of market consensus
$Ono Pharmaceutical (4528.JP)$There was a negative reversal in the back. The company announced at 12:00 on the 31st that consolidated operating profit (IFRS) for the 24.3rd fiscal year 1Q (April-6 months) was 41.35 billion yen (up 8.3% from the same period last year). The market consensus was 43.10 billion yen. While the competitive environment intensified for “Opdivo intravenous infusion,” the expansion of use for gastric cancer, esophageal cancer, urothelial cancer, etc. contributed.

KDDI utilizes new frequencies for 5G over 8,300 base stations in fiscal year 26
$KDDI (9433.JP)$with $Okinawa Cellular Telephone (9436.JP)$It was announced on the 31st that operation tests for the frequency “2.3 gigahertz band” newly assigned by the Ministry of Internal Affairs and Communications have begun. We are aiming to start service in 2024 at a frequency suitable for the high-speed communication standard “5G.” A total of 32.4 billion yen will be invested, and a total of over 8300 base stations will be developed nationwide by the end of fiscal year 26. It is used in combination with existing frequencies to increase data communication capacity.

Yakult --- the trend of negative views on financial results continues, such as continued decline and falling sales volume in China
$Yakult Honsha (2267.JP)$continues to decline. There was a sharp drop last weekend after financial results were announced, and the trend of sales dominance continues today. First-quarter operating profit was 17 billion yen, up 15.0% from the same period last year, but market expectations fell close to 1 billion yen, and the number of units sold in China declined more than expected. Following the financial results, Nomura Securities downgraded investment decisions from “buy” to “neutral,” and lowered the target stock price from 13100 yen to 8800 yen.

HOYA - Backmarket gains shrink, final profit for the first half is expected to decrease 16% in the 1st quarter, down 21%
$Hoya (7741.JP)$However, the range of increase in the rear field has been reduced. The company announced at 13:30 on the 31st that the consolidated net profit forecast (IFRS) for the first half of the 24.3 fiscal year (April-9), which had been previously undecided, would be 80.5 billion yen (down 15.7% from the same period last year). The market consensus was 86.2 billion yen. Although HDD boards deteriorated in the same period last year in 2Q (July-September), performance is expected to slightly exceed 1Q (April-6 months) due to steady life care business and gradual recovery in LSI blanks.

Automobile stocks such as Toyota are high, and I like the depreciation of the yen after YCC flexibility ◇
$Toyota Motor (7203.JP)$rebounded for the first time in 4 days. The stock price rose to the 2370 yen level, surpassed the June high of 2358 yen, and was bought at a year-to-date high. $Honda Motor (7267.JP)$Ya $Mazda Motor (7261.JP)$Automobile stocks such as these have also increased in price. In the exchange market as of 9:30 a.m., 1 dollar = 140 yen 80 yen, and dollar appreciation and yen depreciation close to 1 yen are progressing compared to 5:00 p.m. on the 28th of the previous weekend.

Mitsubishi UFJ has gone back and forth and is cautious about chasing higher prices of bank stocks due to the Bank of Japan temporary operation notice ◇
As the Nikkei Stock Average temporarily rises above 600 yen compared to the previous weekend, $Mitsubishi UFJ Financial Group (8306.JP)$It's one step forward and one step back. At the monetary policy meeting held by the Bank of Japan until the 28th, fine revisions to long and short interest rate manipulation (yield curve control, YCC) were decided. Regarding the upper limit of the allowable fluctuation range of long-term interest rates, the operation of YCC was made flexible, such as raising the yield level of a “continuous index value operation,” where stocks specified for long-term government bonds are purchased unlimitedly every business day, to around 0.5%.

SoftBank G has entered a new price road, and speculations about Generated AI and the Anglo-Arm IPO under the umbrella stimulate stock prices
$SoftBank Group (9984.JP)$rebelled. The previous weekend was affected by futures-led index sales amid turbulent developments in the overall exchange rate due to the Bank of Japan's monetary policy meeting, but the big close showed strength to land in an almost flat zone. Today, while the Nikkei Average showed a sharp rebound of over 600 yen, the turnaround was clear, and the upper price extended to around 7,300 yen with an increase close to 200 yen.

FANUC --- sharp decline, negative impact on unexpected downward correction
$Fanuc (6954.JP)$The decline continued drastically. The first quarter financial results were announced last weekend, and operating profit was 32.6 billion yen, down 34.5% from the same period last year, and the full-year forecast was revised downward from the previous fiscal year from 156.3 billion yen to 118.3 billion yen, down 38.2% from the previous fiscal year. The full-year market consensus was around 180 billion yen, resulting in an unexpected downward revision.

Toyota Tsusho suddenly rebounds and revises final profit and dividend forecasts for the fiscal year ending March 24 upward
$Toyota Tsusho (8015.JP)$There has been a sudden rebound, and the high prices since listing have been updated. After the end of trading on the 28th of the previous weekend, the final profit for the consolidated earnings forecast for the fiscal year ending March 24 was revised upward from 28 billion yen to 300 billion yen (up 5.6% from the previous fiscal year), and at the same time, the dividend forecast was raised from 204 yen of 102 yen each at the midterm and end of the fiscal year to 214 yen of 107 yen per year, which is 107 yen each, is well received.

Distribution source: Nihon Keizai Shimbun, Traders Web, MINKABU, FISCO