In the morning of the 22nd trading, attention should be paid to the following three points.

-Selective screening with consideration on the Trump trade

-Thirty-One, 2Q operating profit increased by 89.0% to 1.521 billion yen

-Morning Focus: Iwatani Industry, fraud in the equipment inspection results in subsidiary

-Selective screening with consideration on the Trump trade

In the Japanese stock market on the 22nd, amid an unstable market, it is likely to be a movement to find an immediate bottom. In the US market on the 19th, the NY Dow was down 377 points and the Nasdaq was down 144 points. There was strong selling to adjust positions as there were concerns that a failure with Microsoft's Windows system would cause turmoil in the world economy. As earnings announcements began in full swing, market participants were also seeking to determine the contents of the announcements. The Chicago Nikkei 225 futures closing price was 39,660 yen, 380 yen lower than Osaka. The dollar-yen exchange rate has been hovering around 157.20 yen per dollar.

Starting from selling pressure in response to squaring up positions in the Chicago futures market, the market is expected to begin with selling pressure. The Nikkei 225 futures was sold as low as 39,570 yen in the night session, dropping below 0.04 million yen. Though it was announced that the cause of the failure with Microsoft's system had been identified and that services had been restored, there could be selling pressure at the 0.04 million yen level as investors wait for the market to rebound. On the 19th, the Nikkei Average was sold down to 39,824 yen in the morning, followed by a stalemate around 0.04 million yen, where the 25-day line was positioned. If the Nikkei falls below the 25-day line, the 0.04 million yen level could come to be seen as a resistance level on the upper side.

In addition, US President Biden has stated that he will "withdraw" from the presidential election in November and is supporting Vice President Kamala Harris as a successor candidate. With the possibility of the re-election of former President Trump remaining high, the market is likely to be greatly influenced by Trump's future statements. With a policy reversal from the Biden administration, the target for investors could also change significantly. Therefore, selective screening for the Trump trade is likely to be more favorable. As a result, capital inflows into resources and defense-related stocks are likely to be considered. In addition, as earnings announcements begin in full swing, stock picking based on business performance is likely to be more favorable. It will also be important to determine the bottom of semiconductor stocks, which are currently being strongly adjusted for positions. However, there is a possibility that the market will be greatly affected by Trump's remarks, making it difficult to shift positions. Therefore, it is likely that short-term trading aimed at taking advantage of price fluctuations will be at the center.

That is why there is a possibility that funds may flow into resource-related and defense-related stocks. In addition, with the full swing of Japan-US earnings announcements, stock picking based on business performance will be more favorable. It will also be important to determine the bottom of semiconductor stocks, which are currently being strongly adjusted for positions. However, priced are expected to be greatly affected by Trump's remarks, making it difficult to shift positions. Therefore, it is likely that short-term trading aimed at taking advantage of price fluctuations will be at the center.

-Thirty-One, 2Q operating profit increased by 89.0% to 1.521 billion yen

31 Ice Cream announced that its sales revenue for the second quarter of the fiscal year ending in December 2024 was ¥14.198 billion, a year-on-year increase of 26.1%, and its operating profit was ¥1.521 billion, an increase of 89.0% year on year. Collaboration products and campaigns with popular characters were well-received. The company reduced the growth of sales cost by reducing raw material procurement costs and manufacturing costs.

Materials of concern in the morning session

-Active share buybacks

Expectations for inflation to ease in the US.

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

-Iwatani Industry <8088> fraud on the subsidiary's equipment inspection results

-Obayashi Corporation <1802> creates development base in Singapore, promotes construction robotics

-Yokohama Rubber Corporation <5101> tires designed for AI support, improving efficiency in special applications

-Kawasaki Heavy Industries <7012>, first public test run of hydrogen bike providing pulse like feeling

-Toyota Motor <7203> Chairman Akio Toyoda "Starting demonstration city"

-Chiyoda-Kansei <6366> imports hydrogen supply for fuel cell vehicles, in Singapore for verification

-NTT <9432> to introduce original LLM "Tsuzumi" based on proposals from more than 650 businesses

-KDDI <9433> night security at photovoltaic power plants with thermal camera-equipped drones

-NEC <6701> improving virtual PC environment for comfortable remote work

Kikusui HD<6912> Kikusui Electronics, launches a testing composite machine with three features including voltage-resistant and insulation resistance at 10 kV output.

AGS<3648> Starts offering cloud services for system failure detection and notification.

Sekisui Chemical<4204> verifies Perovskite's effectiveness by setting it up in petroleum facilities with Cosmo Oil and others.

Mitsui Chemicals<4183> is steadily achieving results in DX, improving research, development, and production efficiency.

Mitsubishi Estate<8802> uses 3D printing to make wooden buildings. Mitsubishi Jisho Design is in charge of the system.

☆ Schedule of events in the morning session

Not applicable.

07:45 NZ June trade balance (May: +0.204 billion NZ dollars)

10:15 China's one-year loan prime rate (currently 3.45%)