In the morning trading of the 28th, we want to pay attention to the following three points:

Shifting focus to Australian small/mid cap stocks amidst nvidia's earnings waiting.

DyDo, 25/1 performance forecast: Operating profit expected to increase by 17.9% to 4.4 billion yen.

Morning highlights: Oji HD to increase production of film for electric vehicles' capacitors, new facilities to start operating in November.

Shifting focus to Australian small/mid cap stocks amidst nvidia's earnings waiting.

On August 28, in the Japanese stock market, amidst nvidia's upcoming earnings, the market is likely to be in a stalemate. On August 27, the U.S. market saw the Dow Jones Industrial Average up by 9 points and the NASDAQ up by 29 points. The unexpected improvement in the U.S. Consumer Confidence Index in August raised awareness of the resilience of the U.S. economy. Furthermore, expectations of a rate cut by the Federal Reserve in September provided support. Ahead of earnings reports the next day, there was buying back observed in some semiconductor stocks like nvidia, but the cautious mood prevailed, and active trading was limited. Chicago Nikkei 225 futures settled 30 yen lower than Osaka at 38,270 yen. The yen is trading around 143.70 yen to the dollar.

Starting with little movement following Chicago futures, nvidia's earnings are likely to have a significant impact on the overall market, and it would be wise to wait for the results. There seems to be no strong trend towards adjusting positions yet. In a market easily swayed by trades involving indexes, individual funds are likely to lean towards short-term trading in small/mid cap stocks. However, uncertainties in high-tech stocks persist at present, and with nvidia's earnings approaching, there may be potential for buying back to compress short positions.

On the other hand, the yen is strengthening in the foreign exchange market, potentially leading to selling in export-related sectors. Additionally, with the decline in crude oil futures, it is believed that there could be selling for energy stocks due to portfolio adjustments. However, the bias towards downward movement is not expected to strengthen, and overall, it is likely a rebalancing movement ahead of nvidia's earnings. While Nikkei 225 futures were briefly sold down to 38,160 yen in the night session, stability around 38,000 yen is being noted.

The Nikkei Stock Average at the foot level continues to move within a range with the 75-day line since bottoming out around 38,000 yen. While the breakthrough of the 75-day line depends on NVIDIA's earnings, it seems that there is strong buying interest waiting for dips as it approaches 38,000 yen. It is considered that high-tech stocks with significant index impact have factored in the negative impact of NVIDIA's weak price movement. It is also likely that buying on dips for profit-taking will be easier after passing the earnings.

■DyDo, as of 25/1 financial estimates, operating profit increased by 17.9% to 4.4 billion yen.

DyDo <2590> announced its financial estimates for the fiscal year ending in January 2025, which was previously undecided. The revenue is planned to increase by 12.5% to 240 billion yen compared to the previous fiscal year, and the operating profit is planned to increase by 17.9% to 4.4 billion yen. The outlook for the Turkish lira exchange rate and inflation rate for the beverage business in Turkey has been unclear until now, leading to the decision to leave the full-year performance forecast undecided. The progress rate of operating profit for the second quarter is 52.7%.

Materials of concern in the morning session

The Nikkei average rose (38288.62, +178.40).

The Dow Jones Industrial Average rose (41250.50, +9.98).

The Nasdaq Composite Index rose (17754.82, +29.05).

The SOX Index rose (5153.63, +56.29).

The VIX Index fell (15.43, -0.72).

Expectations for inflation to ease in the US.

Active share buybacks

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

- Prince HD <3861> Increase production of film for electric vehicle capacitors, new facilities to start operation in November.

- JTEKT <6473> Invests 110 billion yen in growth over the next 3 years, expanding business with a focus on problem-solving.

- SBI Holdings <8473> Invests 10 billion yen in AI emerging technologies, developing the next-generation semiconductor.

- Sumitomo Forestry <1911> Supports forest credits with NTT Communications, providing a foundation for creation, examination, and transaction.

- Kawasaki Kisen Kaisha <9107> is considering the standard specifications of liquefied CO2 transport ships with three major marine shipping companies and shipbuilding companies.

- Toyota Tsusho <8015> and Ogihara plan to establish a new car parts company in South Africa and start production in 2026.

- Pailorax <5988> follows the trend of Chinese companies and improves development productivity by 25%.

- Brother Industries <6448> expands its processing capabilities and supports large-scale EV parts with a new model of small-sized MC.

- Yamazen <8051> will conduct a demonstration of 10 automatic transport robots at its new logistics base in Osaka in November.

- Toyo Engineering <6330> and Itochu plan to start commercial production of green ammonia in Indonesia in 2027.

- Nikon <7731> has invested in a new emerging fund in the US with a scale of 7.5 billion yen, focusing on energy-related projects.

- Sharp <6753> has started receiving orders for slim type automatic transport robots with a simultaneous loading capacity of 20kg x 4 boxes.

- Sony G <6758> develops its own blockchain for use in "Web3" business.

- Taiyo Yuden <6976> builds a new factory in Aomori to increase production of aluminum electrolytic capacitors.

- Resonac HD <4004> expands its chemical raw materials into recycled plastics technology.

- Toyobo <3101> supplies ultra-high strength polyethylene fiber to floating wind turbine mooring ropes through MC.

- Nankai Chemical <4040> expands its environmental recycling efforts.

- Mitsui Fudosan <8801> starts construction of a high-rise complex building for the Tokyo Station redevelopment project, partnering with Kajima Construction and others.

- Members <2130> aims to develop carbon-neutral DX talent, targeting 1,000 people in three years.

- NGK Insulators <5333> receives orders for NAS batteries from Taiwan Power Company.

- Taisei Construction <1801>: Balancing light and air conditioning transparency with CO2 reduction and design.

- Shimizu Construction <1803>: Automatic calculation of CO2 emissions in infrastructure development.

☆ Schedule of events in the morning session

Not applicable.

- 10:30 Australia: July Consumer Price Index (Year-on-year forecast: +3.4%, June: +3.8%)