In trading five days ago, there are three points to note.

Individual response based on settlement.

Nintendo's 1Q operating profit decreased by 70.6% to 54.5 billion yen.

Today's focus materials for the morning session: DMG Mori Seiki Co., Ltd. consolidated 5 ball screw manufacturing steps into 1 composite machine and improved productivity by more than 20%.

Individual response based on settlement.

In the Japanese stock market on the 5th, as bias toward a decline strengthens, it seems that there will be a move to search for a short-term bottom. On the US market on the 2nd, the NY Dow was down 610 dollars, and the Nasdaq was down 417 points. In the US employment statistics for July, the number of non-agricultural employees increased by 114,000 compared to the previous month, which was below the estimate (an increase of about 175,000 people). While expectations for interest rate cuts are increasing, selling due to caution about a recession spread. Amazon.com also fell significantly because its revenue forecast fell short of expectations. The clear settlement price of the Chicago Nikkei 225 futures was 34,950 yen, which was 970 yen lower than Osaka. The exchange rate for the yen is currently at around 146.30 yen per dollar.

The market is likely to start with selling pressure as it falls following the Chicago futures. The Nikkei average fell below 36,000 in a record drop last week. Although it has fallen all the way to the 52-week line level, it is easy to notice that it is oversold. However, the Nikkei 225 futures fell below the 52-week line in the night session, and there were scenes where it was sold down to 34,350 yen. While bias towards a decline is strengthening, it is difficult to enter into buying with lower expectations in mind, even though the futures market is piling up hedges.

In the US market on the 2nd, the earnings of large tech stocks such as Amazon were disliked, and Intel fell more than 26%. In addition, Nvidia is reportedly delayed in designing its next-generation AI semiconductor due to design flaws, as well as reports that the US Department of Justice's antitrust authorities are investigating the company. There is also concern that the adjustment of high-tech stocks will intensify, which could be a burden on index impact. As for trading, it is likely to be a specific response based on earnings. In the previous week's decline, even stocks that announced good earnings were conspicuous in being sold, but it is expected that there will be a review when there is consciousness of a short-term bottom. Also, after the close of trading on the 2nd, attention is focused on companies that announced earnings such as Sanrio <8136>, Sumitomo Mitsui <8316>, Minebea <6479>, Celcysis <3663>, Enaidei <2349>, NIC <5742>, LINE Yahoo <4689>, Gurunavi <2440>, NTN <6472>, and Nippon Avionics <6946>. The Nikkei average may become conscious of a bottom in its 52-week line breakdown, and in the short term, it is likely to be headed for a self-rebound stance.

As a result of screening, individual responses based on settlement seem to be likely. Even in stocks that announced good earnings during last week's decline, moves to sell were prominent. However, during a period where an immediate bottom is being anticipated, reevaluation movements are expected. The following stocks have drawn attention after announcing earnings after the end of trading on the 2nd: Sanrio <8136>, SMBC <8316>, Minebea <6479>, CelSys <3663>, NID <2349>, NIC <5742>, LINE Yahoo <4689>, Gurunavi <2440>, NTN <6472>, Nippon Avionics <6946>, among others. In addition, the Nikkei average stock price may hit a bottom due to breaking through the 52-week line, and in the short term, it is likely to move toward an autonomous rebound stance.

Nintendo's 1Q operating profit decreased by 70.6% to 54.5 billion yen.

Nintendo Co Ltd <7974> announced its first quarter performance for the March 2025 fiscal year, with revenue of 246.638 billion yen, a decrease of 46.5% compared to the same period last year, and operating profit of 54.51 billion yen, down 70.6% year-on-year. Sales of 'Nintendo Switch' decreased. In addition, last year there was an effect of revenue from popular titles such as 'Tears of the Kingdom' for Switch and the movie 'The Super Mario Brothers Movie', so the reaction came out this time.

Materials of concern in the morning session

Long-term US interest rates fell.

Expectations for inflation to ease in the US.

Active share buybacks

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

DMG Mori Seiki Co., Ltd. consolidated 5 ball screw manufacturing steps into 1 composite machine and improved productivity by more than 20%.

Sony Group Corp's semiconductor laser shipments are doing well and contributing to increased data center storage.

Japan Airlines Co., Ltd., Itochu Corp, and 7 other companies in environmental value trading, demonstrate SAF to reduce greenhouse gases.

Mitsubishi UFJ Financial Group, Inc. Mitsubishi UFJ Bank invests 63.3 billion yen in Philippine companies to expand Fintech.

Kyocera Corporation Sponsored ADR and Photocross, Inc. concluded a comprehensive agreement in the fields of astronomy and space, and provided advanced technology to the Araki Telescope.

Nippon Shokubai Co., Ltd. SAP production expansion, investing 16.4 billion yen in Indonesia.

Gunze Ltd. and Horison Co., Ltd. have reached a basic agreement to transfer their mechatronics business.

Honda Motor Co., Ltd.'s new 'Freed' receives orders for a cumulative total of 38,000 units, six times the planned sales in one month.

Toyota Motor Corp. and Tata Group demand removal of hybrid vehicle preferential treatment, intensifying competition with Toyota.

Mitsui E&S Holdings Co., Ltd. received orders for 21 harbor cargo-receiving cranes in Vietnam.

FUJI CORPORATION's waste sorting robot automatically removes debris and impurities, achieving human or higher level speed with AI.

KDDI Corporation is building a new data center in Tokyo and Tama in preparation for AI-related expansion.

Panasonic Corporation's nanoe device shipments are expected to double in fiscal year 30, with more than half for automotive use.

Obayashi Corporation has developed a seedling production system that optimizes the use of artificial and natural light.

☆ Schedule of events in the morning session

Not applicable.

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At 10:45, China's Caixin Services PMI for July is expected to be 51.5, up from 51.2 in June.