Tokyo Market Morning Outlook (Oct 1, Thu): Buybacks in tech on PCE slowdown / MU reports stellar earnings. Nikkei futures up 1,600 yen, likely to open higher

1. Market Overview (NY Market Trends)

Good morning. Today’s Tokyo market is expected to see a strong opening led by semiconductor stocks, as favorable factors align: Dow down, Nasdaq up, PCE slowdown, MU’s stellar earnings, and the yen remaining in the 157 range.

Last night’s NY market saw mixed results due to a tug-of-war between interest rate trends and inflation indicators. The PCE price index, released before the opening, came in below expectations, easing inflation concerns and prompting buybacks in tech stocks alongside a decline in the US 10-year Treasury yield.

Furthermore, after the market closed, Micron Technology (MU) announced stellar earnings that significantly exceeded market expectations. A substantial increase in revenue and a dramatic improvement in operating margins were confirmed, signaling a strong recovery in the semiconductor memory market.

Following this trend, Nikkei 225 futures also rose significantly overnight. Today’s Tokyo market is likely to see strong buy orders, primarily in the semiconductor and manufacturing equipment sectors, driving the market.

NY Market (Oct 1) Closing Prices

• Dow: 50,906.05 (-443.87, -0.86%)

• Nasdaq: 26,861.07 (+63.53, +0.24%)

• S&P 500: 7,651.54 (-19.30, -0.25%)

• VIX: 16.34 (+0.30, +1.87%)

• US 10-Year Treasury: 5.290% (+0.05)

• USD/JPY: 157.38 yen (yen weakness maintained)

• WTI: $90.34 (+1.53%)

2. Summary of Key Indicators (Oct 1, 06:23)

3. Today’s Key Points (Tokyo Market)

📈 Tailwinds and Support Factors

• Semiconductor boost from MU (Micron) stellar earnings

• Ripple effect on manufacturing equipment stocks; buyback pressure on tech stocks following the US PCE deflator slowdown

• Nikkei 225 futures (Osaka/CME) up over 1,600 yen

• Support for export stocks due to the yen remaining at the 157-yen-to-the-dollar level

📉 Headwinds and Cautionary Factors

• Weight on cyclical stocks as seen in the NY Dow’s 3-day decline (-$443)

• Renewed rise in US 10-year Treasury yields (to the 5.29% range)

• Cautious stance ahead of US employment data (Oct 2) and rising VIX

4. Today’s Scenario

◆ Main Scenario “Semiconductor-led significant buying at the open -> Morning session maintains high levels -> Afternoon session sees wait-and-see/profit-taking ahead of employment data”

• Opening: Significant gains at the start following Osaka futures. Semiconductor and manufacturing equipment stocks to rise across the board.

• Morning Session: Focusing on MU earnings and US tech gains, buying will center on AI, electronic components, and manufacturing equipment.

• Afternoon Session: Ahead of tomorrow night’s US employment data release, profit-taking and a wait-and-see mood may spread at high levels.

◆ Risk Scenario

• A “peak at the open” scenario and accelerated profit-taking in high-priced semiconductor stocks

• Increased selling pressure on defensive and cyclical stocks due to aversion to high US interest rates

5. Sector Strategy Points

🟥 Semiconductors/AI/Growth (Strong/Buybacks)

MU earnings are strong. Buybacks are likely to enter broadly across manufacturing equipment, memory, and logic.

🟩 Banks/Insurance (Neutral)

US interest rates are rising again. However, their presence is likely to be relatively diminished on a tech-led day.

🟦 Automotive/Exports (Supported by weak yen)

The yen remaining in the 157 range provides support. Its contribution to a semiconductor-led market is relatively small.

🟪 Materials, Resources, Steel (Mixed)

Crude oil saw a slight rebound, but the aftereffects of yesterday’s sharp drop remain. It is difficult to discern a clear direction.

🟫 High-Dividend Stocks, Defensive Stocks (Neutral)

With interest rates remaining high, aggressive buying is unlikely. While they are candidates for buying on dips, they are unlikely to take center stage.

6. Today’s Important Schedule

<Domestic>

<Overseas>

• Chinese markets closed (National Day)

• US ISM Manufacturing Index (23:00)

• US Initial Jobless Claims

• Nike Earnings

7. Summary

The Tokyo market today is expected to start with strong buying, led by the semiconductor sector, following Micron’s (MU) stellar earnings and tech buybacks driven by the slowdown in US PCE. Aided by a rise of over 1,600 yen in futures and the weak yen, a firm performance is expected in the morning session.

However, the most important event, the US employment report, is scheduled for tomorrow, October 2nd. Be cautious of potential profit-taking at high levels or a shift to a wait-and-see mood during the afternoon session after the initial buying subsides.

Today, I want to gauge how long the buying in semiconductor stocks will last after the opening.

Disclaimer

*This article is a personal analysis and does not recommend buying or selling.
*Information and figures may contain errors.
*Please make investment decisions at your own risk.