In the morning session on the 17th, three points deserve attention.

Movement targeting high-tech stocks.

Mitsui High-tec, 1Q operating profit up 3.9% YoY to 3.971 billion yen, stock split of 1:5.

Focus of the morning session: Canon, data collaboration for semiconductor back-end process, system development.

Movement targeting high-tech stocks.

The Japanese stock market on the 17th is likely to have a market development that is conscious of stability after a round of selling. On the 14th, the U.S. market saw the Dow Jones Industrial Average fall by 57 dollars and the Nasdaq rise by 21 points. Because the Michigan Consumer Confidence Index in June fell more than expected, concerns about consumption slowing down became a heavy burden, and amid the selling of cyclical stocks, the Dow Jones continued to fall. On the other hand, the Nasdaq index continued to rise in response to buying prompted by the decline in U.S. long-term interest rates and Adobe's strong earnings. The Chicago Nikkei 225 futures fell 345 yen lower than Osaka to 38,495 yen. The exchange rate of the yen is moving around 157 yen and 50 sen per dollar.

It is expected to start somewhat bearish due to a close to Chicago futures. The Nikkei 225 futures were sold to 38,280 yen at one point during the night session, and generally ranged from around 38,300 yen to 38,500 yen. It is likely to make investors nervous as it has fallen below the 25-day moving average and dropped to the Bollinger band -1σ level. In the United States, expectations of a rate cut have risen in response to economic indicators falling below expectations, but nervousness about opacity regarding the U.S. economy is also increasing.

The Nikkei average stock price at the end of last week surpassed the 25-day moving average, and there were even scenes of it catching the 75-day moving average at one point. It was a day when it stayed above the SQ value for June (38,535.35 yen), but stability at the same level is likely to be conscious today. In the United States, the Nasdaq is updating record highs daily, led by high-tech stocks, and in terms of linkage, attention is likely to be focused on the large impact on the index and the movement of high-tech stocks. If stability is seen in the Nikkei average stock price at the SQ value, it is likely to lead to a movement targeting declines in high-tech stocks. On the other hand, it should be noted that profit-taking is likely to come into play for value stocks amid general stagnation.

Also, Arm Holdings will be included in the Nasdaq 100 index on the 24th. In addition to the trends of SoftBank Group <9984> and AI-related areas, expectations are also high for searches for acquisition targets. It is unlikely that the search will spread, but short-term funds may be more concentrated on core stocks with the aim of taking price differences. On the other hand, it should be noted that profit-taking may come into play for value stocks amid general stagnation.

Mitsui High-tec, 1Q operating profit up 3.9% YoY to 3.971 billion yen, stock split of 1:5.

Mitsui Hi-Tech <6966>'s performance for the first quarter of the fiscal year ending January 2025, announced, the revenue was JPY 50.431 billion, up 11.4% from the same period last year, and the operating profit was JPY 3.971 billion, up 3.9% from the previous year. For the fiscal year ending January 2025, the revenue is planned to be JPY 237.0 billion, up 21% from the previous period, and the operating profit is planned to be JPY 21.0 billion, up 15.9% from the previous year. It also announced that it would split one share into five shares effective on August 1st.

Materials of concern in the morning session

The Nikkei average rose (38,814.56, +94.09).

The NASDAQ composite index rose (17,688.88, +21.32).

1 dollar = 157.30-40 yen.

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.

Canon <7751>, data collaboration for semiconductor back-end process, system development.

Kirin HD <2503>, acquisition of Fancl, a trump card for becoming profitable, and independent in health business.

Sumitomo Corporation <8053>, CCS business expansion, 1000 tons of oil well pipes supplied to Qatar.

Sojitz <2768> produces Grisanmonia in India, supplies Japan starting from the late 2020s.

Mitsui Chemicals <4183>, core petrochemicals operating income of 20 billion yen, expected around 2025.

Sumitomo Corporation <8053>, president of Sumitomo Corporation Indonesia, Nobuyuki Yonezu, regarding green electricity and water resource utilization.

Mizuho FG <8411>, partnering with Swiss companies for sustainable finance, also for ultra-high net worth people's business.

Aim to regenerate the Akebono Brake Industry <7238>, and repay the existing borrowings of 49 billion yen.

Sanden <6444> received orders for electric vehicle air conditioners in the United States and is considering production in Mexico.

Brother Industries <6448> collaborates with RoboEngine and proposes the automation of 5-axis MC.

Kawasaki Heavy Industries <7012> aims for liquefied hydrogen network in Europe and is considering a supply station with Daimler.

JGC HD <1963> received the EPC contract for the Abu Dhabi LNG plant, which consists of two series with an annual production capacity of 4.8 million tons.

Kubota <6326> is developing a raw material supply device and utilizing the technology of the acquired German company.

Panasonic HD <6752> designs home appliances with a circular economy in mind, improving repair and durability.

KDDI <9433> achieves 2.8 times the area of the sub-6 in the Kanto region with 3 times the communication speed.

NEC <6701> supports business improvement by visualizing on-site activities with AI-powered data analysis.

Kajima <1812> reduces manpower by 80% with high-flow concrete that does not require consolidation.

JFE Steel suppresses bending of ultra-high-tensile steel plates and adopts technology for automotive frames.

Shimizu Construction stores a manufacturing and battery unit for hydrogen facilities in a container.

NGK Insulators <5333> released an improved version of NAS batteries for overseas use with reduced deterioration and initial investment.

Fujifilm <4901> will begin operating its semiconductor material factory in South Korea at the end of December.

☆ Schedule of events in the morning session

8:50 April machinery orders (excluding ships and power demand) (-3.0% forecast for the previous month, +2.9% in March)

11:00 China-May mining and industrial production (+6.2% expected YoY, +6.7% in April)

11:00 China-May retail sales (+3.0% expected YoY, +2.3% in April)