In the morning of the 19th, there are three points that deserve attention when it comes to trade.

■With the FOMC passage, it is easy for buying on dips to be targeted.

Saison Techno has announced a downward revision of its second quarter forecast for the fiscal year ending in March 2025. Sales are revised from 12.5 billion yen to 11.5 billion yen, and operating profit is revised from 0.9 billion yen to 0.8 billion yen. It is expected that some of the system development projects in the distribution IT services business will be recorded in the second half of the year, resulting in lower-than-expected values compared to the previous forecast.

■Key materials in the morning: Toho Gas, aluminum melting and holding by hydrogen combustion, burner development

■With the FOMC passage, it is easy for buying on dips to be targeted.

On the 19th, the Japanese stock market started with buying momentum, but is likely to face a deadlock situation later, with a sense of firmness being perceived. On the 18th in the U.S. market, the NY Dow was down 103 points, and the Nasdaq was down 54 points. The Federal Reserve Board (FRB) decided on a 0.5% rate cut at the Federal Open Market Committee (FOMC). Although there were scenes of significant buying after the results were revealed, there was also a preemptive move and profit-taking selling dominated after the event passed. During the press conference after the meeting, Chair Powell of the FRB pointed out that there is no urgent need for further rate cuts, leading to a late-session weakness in the stock market as interest rates rose. The settlement price of Chicago Nikkei 225 futures was 190 yen higher than Osaka at 36,370 yen. The yen is trading around 142.20 yen per dollar.

The Nikkei average stock price is expected to start with buying momentum following the Chicago futures market, as in the U.S. there has been a strong move towards a significant rate cut, leading to profit-taking selling after the results were revealed. On the other hand, in the Tokyo market, concerns were raised about the narrowing of the interest rate spread between Japan and the U.S., leading to unstable price movements. An unwinding trend is likely to be perceived after the FOMC passage.

In addition, there were scenes of volatility in the Nikkei 225 futures market immediately after the FOMC results were announced. However, as it did not fall below 36,000 yen, towards the end there was a predominance of short covering, and trading ended at the high in the night session. It may be difficult to expect a strong rebound from the weak price movements of U.S. semiconductor stocks, but it is likely that buying on dips will be targeted. After the FOMC passage, the market's attention will shift to the Bank of Japan's monetary policy meeting, but considering that the previous rate hike triggered turmoil, the possibility of a consecutive rate hike at 2 meetings is considered low.

It is likely to continue to be a development monitored by the exchange rate, but if there is a short-term selling movement in anticipation of the Bank of Japan meeting, let's aim for a rebound afterwards. In Lebanon, it seems that Japanese-made radios were used while wireless communication devices such as radios explode almost simultaneously every day. Amidst the increasing geopolitical risks, it is likely to lean towards the defensive sector as a target for trading. In addition, there is also a supply and demand situation that is easily influenced by index trading, and it is expected that individual investors' funds will tend to flow into small and mid-cap stocks.

Saison Techno has announced a downward revision of its second quarter forecast for the fiscal year ending in March 2025. Sales are revised from 12.5 billion yen to 11.5 billion yen, and operating profit is revised from 0.9 billion yen to 0.8 billion yen. It is expected that some of the system development projects in the distribution IT services business will be recorded in the second half of the year, resulting in lower-than-expected values compared to the previous forecast.

Saison Techno (9640) has announced a revision to its 2nd quarter earnings forecast for the fiscal year ending in March 2025. Sales are revised down from 12.5 billion yen to 11.5 billion yen, and operating profit is revised down from 0.9 billion yen to 0.8 billion yen. This is due to the delay in recording some sales from system development projects in the distribution IT services business in the second half of the year, resulting in lower-than-expected values.

Materials of concern in the morning session

- The Nikkei average rose (36,380.17, +176.95).

- 1 dollar = 141.90-00 yen.

- Chicago Nikkei futures rose (36,370, Osaka day shift +190).

USAInflationExpecting a calming period.

Active share buybacks

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

- Toho Gas <9533>: Developed a burner for aluminum melting and retention using hydrogen combustion.

- Mitsubishi Corporation <8058>: Conducting a demonstration of the 'Convenience Store of the Future' with KDDI and Lawson.

- Nippon Steel <5401>: The security review of the acquisition of US Steel will be accepted by the US government after the presidential election, and a re-application will be made.

- Asahi Kasei <3407>: Sold its blood purification business to Integral for 56.5 billion yen.

- Nippon Yusen <9101>: Considering the development of ship recycling business with Oono and the shipbuilding industry.

- Sumitomo Bakelite <4203>: Sumitomo Chemical partially sells its stake to a Singapore government-owned entity.

- Toyota Tsusho <8015> partners with a US company for cyber security measures and promotes system development for cars, agricultural machinery, and construction machinery.

- J-POWER <9513> and Tohoku Car Industry Green Energy Association collaborate to supply renewable energy in Miyagi.

- DMG Mori Seiki <6141> holds groundbreaking ceremony for European headquarters as a venue for exhibitions, business negotiations, and international exchange.

- NEC <6701> improves reliability of large liquid monitor displays with new functions to address "hallucinations".

- Cybertrust <4498> collaborates with Efface Technologies on the operation of Linux OS for cybersecurity.

- Kyocera <6971> establishes CVC fund for emerging markets in Europe and the United States.

- Obayashi Construction <1801> develops barrier material for underground water purification walls to adsorb PFAS for a long period of time.

- SUMCO <3436> collaborates with Saga University and AIST to utilize AI in semiconductor wafer production.

- Chubu Electric Power Company <9502> starts operating a farming-type photovoltaic power station in Mie Prefecture.

- Tokai Carbon <5301> achieves growth with SiC wafers and promotes structural reform, swiftly addressing the issues of graphite electrodes and S&L.

- Haseko Corporation <1808> establishes a new precast floor factory in Ibaraki, manufacturing over 3,000 units per year.

- Mitsui Fudosan <8801> opens a new hotel in Ginza on the 30th, improving the convenience of consecutive stays.

- Tokyo Tatemono <8804> opens the "Hilton Kyoto" to capture tourist needs.

- Kurita Industries <6370> predicts a decline in paper quality and analyzes water quality data.

☆ Schedule of events in the morning session

- Bank of Japan monetary policy meeting (until the 20th).

- 07:45 NZ: Preliminary GDP for Q4-Q2 (YoY forecast: -0.6%, Q1-Q3: +0.3%).

- 10:30 Australia: Unemployment rate for August (forecast: 4.2%, July: 4.2%).

- 10:30 Australia: Employment change for August (forecast: +0.026 million people, July: +0.0582 million people).