Tokyo Market Summary: Nikkei Average falls, caution with nvidia earnings, trend of buying dollars and selling yen continues.
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The Nikkei average closed at 38,352.34 yen, down 62.09 yen from the previous trading day.
Temporary active buying of yen, but yen selling dominance resumes.
●InflationFrom calming down, the Japanese economy is on track for recovery - SMBC Nikko Securities
Advantest - Sturdy; Company President: 'Long-term contracts for core components' ROIC penetration on-site
Renesas - Nomura lowers target stock price Short-term inventory adjustments worsen, but gradual recovery expected by 2025
Hot Stocks: $Kadokawa (9468.JP)$、 $Renesas Electronics (6723.JP)$、 $Advantest (6857.JP)$
- moomoo news on individual Japanese stocks Sherry
The Nikkei average closed at 38,352.34 yen, down 62.09 yen from the previous trading day.
Temporary active buying of yen, but yen selling dominance resumes.
●InflationFrom calming down, the Japanese economy is on track for recovery - SMBC Nikko Securities
Advantest - Sturdy; Company President: 'Long-term contracts for core components' ROIC penetration on-site
Renesas - Nomura lowers target stock price Short-term inventory adjustments worsen, but gradual recovery expected by 2025
Hot Stocks: $Kadokawa (9468.JP)$、 $Renesas Electronics (6723.JP)$、 $Advantest (6857.JP)$
- moomoo news on individual Japanese stocks Sherry
Market Overview
The Nikkei Stock Average on the Tokyo stock market today closed at 38,352.34 yen, down 62.09 yen from the previous trading day, while the Tokyo Stock Price Index (TOPIX) closed at 2,698.29, down 11.74 points.
The Nikkei Stock Average on the Tokyo stock market today closed at 38,352.34 yen, down 62.09 yen from the previous trading day, while the Tokyo Stock Price Index (TOPIX) closed at 2,698.29, down 11.74 points.
Top News
Temporary yen buying activity became active, but yen selling regained dominance.
The Ukrainian military launched the American long-range weapons 'ATACMS' against Russia, causing concerns over escalating tensions between Russia and NATO, leading to what seemed like a risk-averse movement in the overseas markets yesterday. However, the sustainability of selling yen is lacking, and yen selling has been predominant during today's Tokyo session despite caution over Russia's response.
Temporary yen buying activity became active, but yen selling regained dominance.
The Ukrainian military launched the American long-range weapons 'ATACMS' against Russia, causing concerns over escalating tensions between Russia and NATO, leading to what seemed like a risk-averse movement in the overseas markets yesterday. However, the sustainability of selling yen is lacking, and yen selling has been predominant during today's Tokyo session despite caution over Russia's response.
The keyword for Japanese stocks in 2025 is 'execution' - major foreign companies.
Goldman Sachs believes that the keyword for the Japanese stock market in 2025 will be 'execution' at both macro and micro levels. Expectations for economic and market reforms that have been progressing since the second half of 2022 are already high, with themes such as the Bank of Japan's normalization of monetary policy, domestic reflation policy, and corporate governance being widely recognized and understood. To continue attracting investors and driving the rise in net fund inflows and stock index levels for the third consecutive year, a gradually positive news flow is deemed necessary. GS believes that the situation is becoming significantly more constructive, predicting that the TOPIX will achieve a positive return for the third consecutive year in 2025.
Goldman Sachs believes that the keyword for the Japanese stock market in 2025 will be 'execution' at both macro and micro levels. Expectations for economic and market reforms that have been progressing since the second half of 2022 are already high, with themes such as the Bank of Japan's normalization of monetary policy, domestic reflation policy, and corporate governance being widely recognized and understood. To continue attracting investors and driving the rise in net fund inflows and stock index levels for the third consecutive year, a gradually positive news flow is deemed necessary. GS believes that the situation is becoming significantly more constructive, predicting that the TOPIX will achieve a positive return for the third consecutive year in 2025.
InflationJapan's economy is moving towards recovery from stabilization - SMBC Nikko Securities.
SMBC Nikko Securities revised its economic outlook following the first preliminary estimate of GDP for the July-September quarter. The real GDP growth rate is +0.5% year-on-year for FY24 and +1.3% for FY25, each downwardly revised by 0.2 percentage points from the previous forecast. When looking at the real GDP growth rates from the 1st to the 3rd quarter, it averages around +0.2% quarter-on-quarter, indicating low growth. There is a significant gap between real GDP and nominal GDP, with inflation restricting economic growth. The rise in inflation is believed to be due to companies excessively passing on the increase in raw material prices to domestic prices, with corporate profits reaching record highs despite high raw material costs. However, as international commodity prices fall and the dollar-yen rate shifts towards a stronger yen, inflation is expected to gradually stabilize, improving purchasing power and leading to a recovery in the economy as forecasted by SMBC Nikko.
SMBC Nikko Securities revised its economic outlook following the first preliminary estimate of GDP for the July-September quarter. The real GDP growth rate is +0.5% year-on-year for FY24 and +1.3% for FY25, each downwardly revised by 0.2 percentage points from the previous forecast. When looking at the real GDP growth rates from the 1st to the 3rd quarter, it averages around +0.2% quarter-on-quarter, indicating low growth. There is a significant gap between real GDP and nominal GDP, with inflation restricting economic growth. The rise in inflation is believed to be due to companies excessively passing on the increase in raw material prices to domestic prices, with corporate profits reaching record highs despite high raw material costs. However, as international commodity prices fall and the dollar-yen rate shifts towards a stronger yen, inflation is expected to gradually stabilize, improving purchasing power and leading to a recovery in the economy as forecasted by SMBC Nikko.
Hot stocks
Kadokawa - Sharp rise, continued speculation on Sony's acquisition talks
$Kadokawa (9468.JP)$Sony Group Corp is hitting the daily price limit. Reports of discussions for the company's acquisition by Sony Group Corp have surfaced during the previous trading session, causing the stock to rise to the daily limit high levels. Today, there is still a dominant upward trend. It seems that Sony Group Corp has traditionally been considered an acquisition candidate due to its abundant and powerful content, and if the acquisition is realized, it is expected to come with a high acquisition premium. Both Sony Group Corp and the company have refrained from making clear comments so far.
Kadokawa - Sharp rise, continued speculation on Sony's acquisition talks
$Kadokawa (9468.JP)$Sony Group Corp is hitting the daily price limit. Reports of discussions for the company's acquisition by Sony Group Corp have surfaced during the previous trading session, causing the stock to rise to the daily limit high levels. Today, there is still a dominant upward trend. It seems that Sony Group Corp has traditionally been considered an acquisition candidate due to its abundant and powerful content, and if the acquisition is realized, it is expected to come with a high acquisition premium. Both Sony Group Corp and the company have refrained from making clear comments so far.
Renesas - Nomura lowered its target stock price, expecting a gradual recovery in 2025 despite the short-term stock adjustment becoming severe. Nomura Securities predicts that despite the short-term stock adjustment becoming severe, there will be a gradual recovery in 2025. They continue to rate it as 'Buy' and have lowered the target stock price from 3100 yen to 2700 yen. After the third quarter (July-September) earnings report, Nomura Securities significantly revised their performance forecast based on interviews and the movements of other companies in the industry. As a result, they also lowered the target stock price. On the other hand, in the fourth quarter, there will be a rapid advancement in inventory reduction by customers mainly in automotive and industrial machinery sectors, although there may be some areas where recovery is delayed. It is assumed that in 2025, sectors where production activities normalize gradually from the beginning of the year will emerge.
$Renesas Electronics (6723.JP)$Stuck in a deadlock. Nomura Securities predicts that while short-term stock adjustments may become severe, there will be a gradual recovery by 2025. They continue to rate it as 'Buy' but have lowered the target stock price from 3100 yen to 2700 yen. Nomura Securities has significantly revised their performance forecast after the third quarter (July-September) earnings report, based on interviews and the movements of other companies in the industry. Consequently, they have also lowered the target stock price. On the other hand, customer inventory compression for automotive and industrial machinery in the fourth quarter is expected to advance rapidly, and although there may be some sectors with delayed recovery, it is anticipated that sectors where production activities normalize gradually from the beginning of 2025 will emerge.
$Renesas Electronics (6723.JP)$Stuck in a deadlock. Nomura Securities predicts that while short-term stock adjustments may become severe, there will be a gradual recovery by 2025. They continue to rate it as 'Buy' but have lowered the target stock price from 3100 yen to 2700 yen. Nomura Securities has significantly revised their performance forecast after the third quarter (July-September) earnings report, based on interviews and the movements of other companies in the industry. Consequently, they have also lowered the target stock price. On the other hand, customer inventory compression for automotive and industrial machinery in the fourth quarter is expected to advance rapidly, and although there may be some sectors with delayed recovery, it is anticipated that sectors where production activities normalize gradually from the beginning of 2025 will emerge.
Advantest - Firm foundation, the company's president stated 'long-term contracts for core components', ROIC penetrating the field = Nikkei
$Advantest (6857.JP)$Steady performance. The Nikkei Digital News reported at 11:00 on the 20th that the company is restructuring its semiconductor manufacturing equipment supply chain. According to an interview with President Koichi Tsukui by the Nikkei Digital News, the company has secured long-term procurement contracts for core semiconductor components and will increase production capabilities by commissioning the production of equipment to suppliers and component vendors. To prepare for risks such as supply chain disruption and to ensure solid growth in response to robust AI demand.
$Advantest (6857.JP)$Steady performance. The Nikkei Digital News reported at 11:00 on the 20th that the company is restructuring its semiconductor manufacturing equipment supply chain. According to an interview with President Koichi Tsukui by the Nikkei Digital News, the company has secured long-term procurement contracts for core semiconductor components and will increase production capabilities by commissioning the production of equipment to suppliers and component vendors. To prepare for risks such as supply chain disruption and to ensure solid growth in response to robust AI demand.
Source: Various company press releases, MINKABU, FISCO, Trader's Web
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