In the morning trade on the 27th, the following three points should be noted.

Expectation of capital inflow as the market enters 2025.

Okaya & Co., operating profit for Q3 increased by 4.6% to 25.8 billion yen.

Material of interest from the morning session: Toho Gas has developed Japan's first burner for hydrogen combustion using indirect and thermal storage.

Expectation of capital inflow as the market enters 2025.

On the 27th, the Japanese stock market is expected to show a robust buying sentiment despite the limited number of market participants. Following the Christmas holiday, on the 26th, the US market saw the Dow Jones Industrial Average rise by 28 dollars, while the Nasdaq fell by 10 points. With limited movement following the Christmas holiday, buying expectations for a year-end rally supported the lower prices. The Chicago Nikkei 225 Futures closed at 39,700 yen, up 210 yen compared to Osaka. The yen's exchange rate is stable around 157.80 yen to the dollar.

The Nikkei Average is likely to see some initial buying as it aligns with the Chicago Futures. The US market showed mixed results, but trading remained subdued with limited participants. The Nasdaq Index is maintaining around 0.02 million, indicating strong buying interest. Although profit-taking actions are likely following the previous day's rise in the Tokyo market, with the actual effective entry into the 2025 market, the buying sentiment remains strong.

Additionally, the inflow of funds associated with NISA is likely to be prominent, and there is an increased tendency for dividend-seeking investments. Recently, Toyota (7203) has shown strong price movements, and if this trend continues today, the fund inflow towards value stocks driven by dividend focus is expected to persist. As the year-end rally comes into focus, the developments of high-tech stocks with significant index impacts are also expected to attract attention.

The night session for Nikkei 225 Futures closed at 39,700 yen. The price has notably remained above the +1σ band of the Bollinger Bands, with the +2σ around 0.04 million yen likely coming into focus. Due to limited participants, trading linked to the Index may be influenced, but strong buying sentiment during adjustment phases is expected. As the end-of-year recovery to around 0.04 million yen is within reach, it is considered likely to boost sentiment, and fund inflows into Australian Small/Mid Cap stocks, which have a sense of lag, may also come into focus.

Okaya Steel Corporation reported a 4.6% increase in operating profit for the third quarter, amounting to 25.8 billion yen.

The performance results for the third quarter of the fiscal year ending February 2025 announced by Okaya Steel Corporation (7485) showed a revenue increase of 1% year-on-year, totaling 827.9 billion 66 million yen, while operating profit increased by 4.6% to 25.8 billion 93 million yen. The Iron & Steel division performed well for the Manufacturing sector, but there was a decline in construction materials-related business. While the Overseas market for Asia decreased, the demand from Europe and the USA increased. The Electronics division saw an increase in information Infrastructure-related items, but there was a decline in vehicle Components and FA-related products. In the Nonferrous Metals division, material prices rose, compounded by an increase in environmentally friendly materials.

■ Key materials for the first half of the trading session

The Nikkei Average is up (39,568.06, +437.63).

• The Dow Jones Industrial Average rose (43325.80, +28.77)

• 1 dollar = 158.00-10 yen

• Chicago Nikkei Futures rose (39700, +210)

• SOX Index rose (5175.31, +1.75)

Active share buybacks

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

Toho Gas <9533> has developed a hydrogen-burning burner using indirect and thermal storage, marking the first of its kind in Japan.

NTT <9432>, along with major Communications companies, is gaining attention for AI data analysis that transcends the boundaries of business and corporations, focusing on cross-sectional infrastructure.

Sekisui Chemical <4204> has started mass production of perovskite and is establishing a new company with the Japan Policy Investment Bank.

Nippon Steel <5401> has abandoned plans to acquire United States Steel by the end of the year and has postponed it to January-March.

JAL <9201> faced a cyber attack, causing temporary issues, but has since restored operations.

Intermesstick <262A> leads the establishment of a new culture for eyewear.

Asahi Kogyo <1975> adopts a higher model for humidity and temperature control devices for Semiconductors, which is used by Rapidus.

R.S.C <4664> acquires Clean Force to strengthen its cleaning sector.

Tenma <7958> establishes a sales base in South Korea and develops a cooperative factory for the local production of storage cases.

Fuso Dentsu <7505> subsidiaries a system company in Obihiro City, Hokkaido.

Tokai Rika <6995> expands the biomass materials used in the manufacturing of Auto Components, improving quality to comply with environmental standards.

Hino Motors <7205> president states, 'The integration discussions with Mitsubishi Fuso are based on reconciliation with the US authorities.'

J-MAX <3422> prepares to strengthen the finances of its Chinese subsidiary, in anticipation of Battery cover production.

Amada <6113> sponsors the doctor helicopter business, providing operational cost support to Tokai University Hospital.

Dexerials <4980> will establish a new management strategy headquarters in January next year.

Tohoku Electric Power <9506> has resumed commercial operation of the Onagawa Nuclear Power Plant Unit 2, the first in the disaster-stricken area.

JFEHD <5411> confirms the safety of potential storage materials for liquid hydrogen, with demonstrations conducted by JFE Steel and others.

☆ Morning event schedule

< Domestic >

08:30 December Core Consumer Price Index for the Tokyo metropolitan area (year-on-year estimate: +2.5%, November: +2.2%).

08:30 November Unemployment Rate (estimate: 2.5%, October: 2.5%).

・08:30 November effective job openings-to-applicants ratio (Financial Estimates: 1.25 times, October: 1.25 times)

・08:50 November industrial production preliminary value (month-on-month Financial Estimates: -3.5%, October: +2.8%)

・08:50 Main opinions from the Bank of Japan monetary policy meeting (for December 18-19) no particular comments

・10:30 Mid-November industrial enterprise profits (October: year-on-year -10.0%)