In the morning session on the 25th, the following three points should be noted.

Short-term trading mainly driven by funds.

J Excellent, downward revision on 24/12, operating profit revised to 4.451 billion yen from 4.812 billion yen.

Focus materials in the first half: Canon Inc-Spons Adr re-enters ArF lithography equipment to gain Share in response to miniaturization.

Short-term trading mainly driven by funds.

The Japanese stock market on the 25th is expected to start with Buy orders but will take into account the adjustment of positions. The US market on the 24th saw the Dow Jones Industrial Average rise by 390 dollars, and the Nasdaq was up by 266 points. Although it was a shortened trading day before Christmas, a wide range of stocks including high-tech and cyclical stocks were bought amid thin trading. The Dow Jones Industrial Average saw easier buying due to the cooling off of overheating from recent adjustments. The Chicago Nikkei 225 Futures (March) settlement price was 39,260 yen, up 140 yen compared to Osaka. The yen is trading around 157 yen per dollar.

The Nikkei Stock Average is likely to see some early buying in line with the Chicago Futures. The previous day's Nikkei Index showed that after an initial rise, selling pressure for position adjustments became dominant, but as the Nasdaq index recovered above the 0.02 million mark, funds are likely to flow into significant high-tech stocks again. However, since the 25th is a Christmas holiday and many countries will be closed, the inflow from Overseas investors is expected to be limited. In addition, short-term trading driven by funds is likely to be predominant, and there is also a tendency for wild fluctuations in Futures due to thin trading conditions. Therefore, it may become difficult to grasp a clear direction.

After the initial Buy orders, the short-term traders are likely to trigger Sell orders, but the Nikkei 225 Futures saw a moment where it was sold down to 39,070 yen in the night session, although there was awareness of support near 39,000 yen. In the scenarios approaching 39,000 yen due to Sell orders, it is advisable to adopt a buying on dips approach. Additionally, while profit-taking Sell orders were seen in previously leading stocks, there was a noticeable movement towards buying value stocks. Although this seems to be a rebalancing movement, if funds are directed towards value stocks again today, high-tech stocks are likely to become more challenging to handle.

Therefore, it is important to first identify the inflow of funds into Value and Growth. If it seems to be directed towards Value stocks, it may lead to a flow towards Dividend-oriented investments. On the other hand, in a phase where high-tech stocks are being bought, it may induce a rebalance from the previous day, suggesting that a short cover in the futures market may also become a focus. Additionally, in a thin market, trading aimed at short-term price movements in Australian Small/Mid Cap stocks led by individual investors is likely to become more active. Short-term funds are likely to concentrate on stocks with strong ongoing trends.

■ J Excellent, downward revision for 24/12, operating profit 4.451 billion yen ← 4.812 billion yen

J Excellent <8987> announced a revision to the financial estimates for the fiscal year ending December 2024. Operating revenue was revised from 11.415 billion yen to 12.732 billion yen, and operating profit was revised from 4.812 billion yen to 4.451 billion yen. This is due to an expected difference of more than 10% from the forecast operating revenue for the fiscal year ending December 2024, which was announced on August 19, 2024, due to the transfer of two specific assets.

■ Key materials for the first half of the trading session

・The Dow Jones Industrial Average rose (43297.03, +390.08)

・The Nasdaq Composite Index rose (20031.13, +266.24)

・1 USD = 157.10-20 yen

・Chicago Nikkei Futures rose (39260, +140)

・The SOX Index has risen (5173.56, +54.81)

・The VIX Index has decreased (14.27, -2.51)

・US crude oil Futures have risen (70.10, +0.86)

Active share buybacks

• The Tokyo Stock Exchange's request for corporate value enhancement

・Honda <7267> is in discussions to merge with NISSAN MOTOR CO, aiming for final agreement by June next year.

・Alps Alpine <6770> invests 15 billion yen in mass production with 10 times the sensitivity of 'magnetic Sensor'.

・ Toshimi Sato has been appointed president of Obayashi Corporation, expanding its business areas Overseas ETC.

・ Toyota Industries Corporation resumes domestic shipments of forklifts, starting with diesel models.

・ JR Kyushu withdraws from the Japan-Korea high-speed ferry service, will not resume operations, and is in liquidation.

・ Japan Post Holdings sues Yamato for 12 billion yen in damages over the review of delivery outsourcing.

・Canon Inc-Spons Adr <7751> re-enters the ArF exposure equipment market, aiming to gain Share through miniaturization.

・Espec <6859> intensifies its semiconductor strategy, launching successive contract measurement services.

・Nippon Steel <5401> believes in presidential approval for the acquisition of United States Steel, statements are made for final decisions.

・Sumitomo Chemical <4005> sells polarized film to two Chinese companies, targeting large LCDs, to local firms next spring.

・Mitsubishi Corporation <8058> promotes the active participation of diverse human resources, believing that imagination from different perspectives is the core of Business.

・FIXER ＜5129＞ registers AI in the government safety standard list.

・Toyota Motor ＜7203＞ is considering a Lexus factory in Shanghai.

・Tokyo Tatemono ＜8804＞ group’s real estate sales, partnering with TerraCharge for EV charging in rental residences.

・Kobe Steel ＜5406＞ group’s Kobelco Construction Machinery is set to launch electric excavators in Europe next year.

・Okada Aiyon ＜6294＞ President Yuji Okada is establishing a system for overseas expansion.

・Komatsu ＜6301＞ showcases lunar construction machinery at CES, highlighting its adaptability to extreme conditions.

・Taiyo Yuden ＜6976＞ has developed a power inductor for wearables, reducing height by 40% to 0.33mm.

・Kddi Corporation ＜9433＞ recreates the space environment in a digital space, co-creating with startups.

・UACJ <5741> major non-ferrous companies accelerate factory DX and solve issues through automation.

☆ Morning event schedule

< Domestic >

・Governor Ueda's speech at Keidanren.

・Markets in Europe, the USA, Oceania, Brazil, and South Africa will be closed for Christmas.