In the morning trading three days ago, we should pay attention to the following three points.

While in a stalemate, there is strong buying interest on dips.

ITO EN, 1Q operating profit decreased by 28.7% to 7.128 billion yen

Highlights of the morning session: Nikon advances with photolithography equipment, focusing on demand for automotive semiconductors.

While in a stalemate, there is strong buying interest on dips.

The Japanese stock market on the 3rd is expected to have a strong market development with a buying interest in waiting for a dip. The US market on the 2nd was closed for Labor Day. In the European market, there was little movement due to a lack of clues, and the development was mixed. The Nikkei 225 futures started with selling in the night session, but later moved into positive territory. The Chicago Nikkei 225 futures settlement price (after hours) was 38,855 yen, 165 yen higher than Osaka. The exchange rate of the yen is fluctuating around 146.90 yen to the dollar.

The Nikkei 225 futures closed above the 75-day moving average in the night session, and the same line is likely to be seen as a support line. Since the flow of overseas investors is limited, short-term trading is likely to be dominant. Therefore, in the case of a situation where futures are sold, it is important to keep an eye on the subsequent short covering and aim for dip buying. In the US, ahead of the release of employment statistics over the weekend, market participants seem to believe that the results of the employment statistics will determine the extent of interest rate cuts by the Federal Reserve in the Federal Open Market Committee (FOMC) in September.

Therefore, it is likely that the cautious mood of wanting to assess the results will increase, and in situations where the slowness of the rebound is recognized, there is likely to be a movement to sell. However, actively taking a position in the seller's market would become a risk, so it is likely to lead to early covering. Yesterday, the Nikkei average started to recover at 39,000 yen but softened and fell below 38,500 yen immediately after the start of the afternoon session. However, it was bought back by the end of the day and closed above the 75-day moving average.

It is advisable to expect buying on dips when the 75-day moving average is breached. Therefore, it is necessary to pay attention to the movement of high-tech stocks that have a large impact on the index. In a limited participation environment, there may be selling of stocks like Tohoku Electric Power <8035> to induce short-selling of futures. In the foreign exchange market, the yen is fluctuating around 146.90 yen to the dollar, showing a weak yen, so there may be a repurchase of export-related stocks.

In addition, if the Nikkei average shows a steady value movement despite the stalemate, individual investors are likely to be inclined towards short-term trading for profit in small and mid-cap stocks with liquidity. Although the Growth 250 Index is currently exchanging blows with the 200-day moving average, if it exceeds that line, there is likely to be a strong interest in small and mid-cap stocks.

ITO EN's operating profit for the first quarter decreased by 28.7% to 7.128 billion yen.

ITO EN (2593) announced its financial results for the first quarter of the fiscal year ending April 2025. Revenue increased by 3.2% to 125.039 billion yen compared to the same period last year, while operating profit decreased by 28.7% to 7.128 billion yen. The rise in raw material prices for coffee beans and vegetable juices had an impact. Increased advertising and publicity expenses, including the use of famous athletes for promotion, as well as increased personnel costs due to wage increases. In the food and beverage business, the Tully's Coffee coffee shop performed well.

Materials of concern in the morning session

- The Nikkei Average rose (38,700.87, +53.12).

1 dollar = 146.80-90 yen.

- The Nikkei futures in the Osaka night session rose (38,780, Osaka day session +90).

- Expectations of interest rate cuts in the USA.

Active share buybacks

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

- Nikon <7731> launches an offensive with its exposure equipment, targeting demand for automotive semiconductors.

- Asics <7936> Executive Vice President and Chief Officer of Global Personnel Development, Mr. Horigome, is accelerating the cultivation of global talent.

- NITTAN <6493> acquires Ena Metal, aiming for 5 billion yen in revenue in the fiscal year 2025.

- Shinmeiwa Kogyo <7224> develops equipment that generates ions using electromagnets and applies gas over a wide range.

- Hitachi Construction Machinery <6305> invests in an Australian company to remotely monitor the environmental impact of mines.

-IHI <7013> Green ammonia for thermal power generation verified in Indonesia

-NTT <9432> NTT Communications expands support for smart building construction, new organization

-Nomura Research Institute <4307> Indexing Japan's 'atmosphere' by attribute

-Shimizu Construction <1803> KDDI and immediate transmission of 3D point cloud data from tunnel construction site

-Sanken Electric <6707> Mass production of power ICs to reduce power loss

-Yashu Electric <3153> President Shigeki Kiyomiya focuses on maintenance of electrical and air conditioning equipment

-Hitachi <6501> Collaborating with HashPort on web3 with biometric authentication

-Mitsui Sumitomo Construction <1821> Development of artificial stone using environmentally friendly concrete

- Haseko <1808>: Logistics facility in Hamura, Tokyo, for wide-area distribution in major metropolitan areas.

- Teijin <3401> Frontier: Expansion of wool substitute polyester production facilities at Thai subsidiary.

- Chubu Electric Power <9502>: Submission of measures to prevent recurrences of document forgery.

- Kaneka <4118>: Efficiency improvement in medical device production centered on Hokkaido, constructing a new plant worth 10 billion yen, automating all processes.

- Kajima <1812>: Development of an AI-based system for calculating the lifetime CO2 emissions of buildings.

- Tosoh <4042>: Collaborating with Kyoto Institute of Technology to improve CO2 separation and recovery efficiency using membrane modules.

- Toda Construction <1860>: Participation in real estate development in the United States.

☆ Schedule of events in the morning session

8:50 Monetary Base for August (July: year-on-year: 1.0%)

10:30 Australian 2nd Quarter Current Account Balance (Forecast: -5 billion Australian dollars, 1st Quarter: -4.9 billion Australian dollars)