October 20, 2026

10/21 (Wed) Morning Session: Oil Prices Fall and US Interest Rates Decline — Outlook for Buying Interest in Major Stocks During the Morning Session

1. Current Situation and Morning Session Outlook

While buying interest is likely to emerge in the morning session, the market environment requires us to gauge whether the opening gains will be sustained. The US S&P 500 rose 0.28% while the Nasdaq fell 0.02%, showing mixed direction; however, morning Nasdaq 100 futures are up 0.92% and the US VIX has fallen 6.13%. Tokyo’s cash index reflects yesterday’s closing price, and based on this combination, we cannot expect a broad-based rally today.

Overseas, oil prices fell amid expectations for dialogue between the US and Iran, and US long-term interest rates also declined. The front-month December contract for crude oil is at $97.82, and the price drop is a factor that eases concerns over costs and interest rates. However, expectations for dialogue do not mean an agreement will be reached, and there is room for supply-related anxieties to reignite. Semiconductor stocks also showed different directions in regular and after-hours trading, so we cannot conclude that buying has spread across all AI-related stocks.

Domestically, Minister of Economic and Fiscal Policy Shindo mentioned attending Bank of Japan meetings while denying any consideration of blocking rate hikes or postponing decisions. These were yesterday’s remarks and are not treated as new policy decisions for today. We must observe the stance of respecting the BOJ’s independence alongside the reactions in bonds and currency. The fact that Japan’s 20-year bond auction was strong is also a reason not to expect interest rates to rise in one direction.

For the morning session, we will refrain from chasing stocks that rose significantly at the open and instead confirm whether they can absorb selling pressure on the first pullback. Focusing on large-cap stocks that maintained relative strength yesterday, our policy is to gauge the strength of selling pressure on rallies for AI-related stocks that saw significant declines. We will also prepare for the possibility that upcoming announcements such as trade statistics and visitor numbers, or reversals in oil and interest rates, could change the market’s direction.

2. Recommended Stocks

🟡 Strong but waiting for a pullback

🟡 6658 Shirai Electronics Industrial

Associated themes: Upward earnings revision, business restructuring
Materials: The full-year upward revision and dividend forecast increase announced on the 19th are clues for individual stock selection. Although the operating profit forecast increased to 1.8 billion yen, it is a decrease compared to the previous fiscal year, and the withdrawal from unprofitable businesses was also indicated. While yesterday’s limit-high shows strong interest, there was only one trade. We will monitor it only if trading continues after the open and the first pullback can be supported.
Supply and demand (inference): While attention may gather again today, there was only one execution yesterday, so we have not confirmed normal ease of trading. Whether buying and selling continue to be executed after the open is the first point of confirmation.
Caution: There is a reaction to pricing in the previously reported revision and a bias in price formation, so we cannot buy based on market improvement alone. We will consider it only on a first-pullback rebound accompanied by continuous executions, and will pass if it breaks below the first-pullback low.

🟡 9983 Fast Retailing

Associated themes: Domestic consumption, index heavyweight
Materials: In a phase where overall market caution is easing, we focus on the relative strength of index heavyweights that maintained gains yesterday. The stock price rose 2.04% to close at yesterday’s high, and trading value was approximately 68.1 billion yen. We do not assume it will be pushed up by new individual positive news, but it is a candidate to check during the post-open pullback to see if it can maintain strength when broad-based buying continues.
Supply and demand (inference): We look for the possibility that buying will continue from yesterday’s high close, but overnight trading volume is limited to 100 shares. We will confirm if it can absorb selling pressure on the first pullback after the open.
Caution: There is a reaction to yesterday’s rise, and if the index’s recovery stalls, it is at a position where profit-taking is likely. We will wait for a first-pullback rebound and exit if it breaks below that pullback low.

🟡 6501 Hitachi

Associated themes: Index heavyweight, relative strength
Factors: If the easing of caution in overseas markets spreads to major stocks in Tokyo, this is a candidate that maintains relative strength from the previous day. It closed at its high yesterday, up 0.64%, with a trading value of approximately 54.5 billion yen. This selection is not based on confirmed new orders or profit growth. We will observe whether buying continues on dips amid the overall market rebound and if it can test higher prices.
Supply and Demand (Inference): The previous day’s high close and sufficient trading volume may lead to interest in buying on dips. The confirmation point is whether it is bought again after an initial dip following the opening.
Caution: There is room for profit-taking to weigh on an opening rise after a high close, and it is not yet confirmed whether buying in major stocks will continue. We will consider it on the first rebound from a dip and pass if it breaks below the initial dip low.

🟡 9432 NTT

Associated Themes: Telecommunications, Index Majors
Factors: We are comparing this as a major stock that was resilient from the previous day in case the Tokyo market rebound continues. It closed at its high yesterday, up 1.14%, with a trading value of approximately 31.5 billion yen. Within the scope of our current confirmation, we have not adopted any new individual business factors, and we do not anticipate a rise based solely on the association with telecommunications. We require that it maintains relative strength after the opening and shows movement that supports dips.
Supply and Demand (Inference): Based on the previous day’s high close, we will look for the possibility of buying re-entering on dips. We will not determine the direction based solely on overnight prices and will confirm the absorption of selling after the opening.
Caution: Care must be taken regarding profit-taking from the previous day’s gains, as the easing of market caution alone does not guarantee upside potential. We will wait for the first rebound from a dip and exit if it breaks below that dip low.

🟡 4307 Nomura Research Institute

Associated Themes: Information Services, Relative Strength
Factors: We are focusing on this as an information services stock that remained positive the previous day when the overall market sees a rebound. It closed up 0.51% yesterday with a trading value of approximately 14 billion yen. However, this selection is not based on confirmed new earnings beats or contracts, and the rise in evening overnight prices did not continue thereafter. We will only target it if it inherits the strength of the previous day after the opening and can recover from a dip.
Supply and Demand (Inference): The previous day’s rise is a support, but overnight prices have fallen from 6,270 yen in the evening to 5,867 yen at the final check. We will confirm whether it can absorb selling after the opening.
Caution: Following only the evening overnight rise is likely to lead to selling on rallies, and the benefits of improved market sentiment are not yet certain. We will consider it on the first rebound from a dip and pass if it breaks below that dip low.

🟡 7203 Toyota Motor

Associated Themes: Automotive, Index Majors
Factors: We are comparing this as a major index stock that avoided a decline the previous day, at a time when market caution is receding and spreading to large-cap stocks. It closed flat the previous day, finishing in the upper range of its intraday price movement, with a trading value of approximately 48.7 billion yen. We have not confirmed any new positive news regarding sales or earnings this time. We will not use exchange rates as the sole reason for buying, and will focus on whether it can absorb selling pressure after the opening and maintain the resilience shown the previous day.
Supply and Demand (Inference): Based on the flat close and the finish in the upper range of the price movement the previous day, we see the possibility of continued relative firmness. We will verify if buying returns after the initial dip following the opening.
Caution: The previous day’s firmness alone does not guarantee continued gains, and currency reversals or a stall in the recovery of major stocks are also burdens. We will wait for a rebound after the first dip and exit if it breaks below that support level.

🟡 6758 Sony Group

Associated Themes: Index major, relative strength
Factors: We are monitoring this as a large-cap stock that remained flat the previous day, in case the receding caution regarding overseas stocks spreads to Tokyo. It closed in the upper range of its intraday price movement the previous day, with a trading value of approximately 47.4 billion yen. We have not confirmed any new business announcements or upward revisions to profits this time, so this selection is not based on the strength of individual factors. We will wait for a pattern where it is not pushed down by selling after the opening and is bought back after the first dip.
Supply and Demand (Inference): The previous day’s close in the upper range of the price movement may provide support, but we cannot judge today’s buying dominance based solely on overnight trading. We will confirm if the initial dip after the opening is supported.
Caution: If it opens too high relative to the previous day’s resilience, profit-taking is likely to occur first, and overseas buying is not uniform. We will consider it upon a rebound after the first dip and pass if it breaks below that support level.

🟡 6857 Advantest

Associated Themes: AI semiconductors, index major
Factors: This is a candidate for monitoring if the morning overseas futures and after-hours rebound in semiconductor stocks spread to Tokyo. However, the US semiconductor index saw a slight decline in regular trading, and it also fell 1.68% in Tokyo the previous day, closing near its low. Although there was a trading value of approximately 617.9 billion yen, this does not indicate a recovery in strength. We will not chase it based solely on AI associations and will make the absorption of selling after the opening and a rebound from a dip our conditions.
Supply and Demand (Inference): While there is a possibility of buying interest returning during the overnight recovery, it closed near its low the previous day. The point to confirm is whether it can absorb selling pressure on rallies after the opening.
Caution: Due to the previous day’s decline, selling pressure may remain at higher levels, and reactions in overseas semiconductor stocks are also mixed. We will wait for a rebound after the first dip and exit if it breaks below that support level.

🟡 9984 SoftBank Group

Associated Themes: AI investment, index major
Factors: If the rebound in US futures spreads to AI-related stocks in Tokyo, we will check for buybacks in major index stocks. The previous day closed near the lows with a 6.01% decline, accompanied by approximately 231.3 billion yen in trading volume. While there is significant trading volume, this does not confirm new investment results or profit growth. We will not assume the overnight recovery translates directly into strength today, and will observe whether selling can be absorbed after the opening.
Supply and Demand (Inference): While there is room for buybacks after a significant drop, we also anticipate selling on rallies given the previous day’s close near the lows. We will check if buying continues after the initial dip following the opening.
Caution: The day after a sharp decline is prone to high volatility, and continued buying across all AI-related stocks has not been confirmed. We will only consider positions on an initial dip rebound and will pass if it breaks below that dip low.

🟡 8306 Mitsubishi UFJ Financial Group

Associated Themes: Banks, Interest Rates
Factors: We will check if the rise in US financial stocks spreads to Tokyo bank stocks as a large-cap comparison candidate. The previous day saw a 3.65% decline, and it was reported that the awareness of falling interest rates following a strong 20-year bond auction led to selling in bank stocks. Although there is about 108.8 billion yen in trading volume, falling interest rates are also a headwind. We will not buy based solely on overseas rebounds, but only if they can absorb selling after the opening and support a dip.
Supply and Demand (Inference): While buybacks after the decline can be expected, we remain cautious of selling on rallies from the previous day’s close near the lows. We will verify if selling runs its course after the opening.
Caution: Since selling pressure that dislikes falling interest rates may remain, we cannot be bullish just because market caution has receded. We will wait for an initial dip rebound and exit if it breaks below that dip low.

3. Overall Strategy/General Precautions

Do not chase the opening rise; focus on stocks that absorb selling on the first dip and rebound. Prioritize major stocks that were strong the previous day, and only respond to buybacks of significantly fallen stocks after confirming sustainability. For Shirai Electronics Industrial (6658), since there was only one trade the previous day, first confirm that trading is occurring continuously. News confirmation is up to 8:03 AM. Depending on price movements after the opening or information released thereafter, choosing to pass is also an option.

* This content is based solely on AI statements. It is not a list of “stocks guaranteed to rise,” but focuses on stocks with abundant volume and active price movement. Please carefully consider your own actual trading decisions.