JAPAN FIRST TO MARKET

Research evidence excerpt

JAPAN FIRST TO MARKET

Asia Pacific Equity Research

Japan First to Market 24 June 2026

Top Stories

Japan Quant Strategy (Masanari Takada)

Preparing for the end-June reversal period: Direction of momentum stock rotation, CTAs hesitate,

and market concentration continues

Today (June 23) the Nikkei Average briefly reached the 73,000 level but then fell back. Domestic demand and defensive stocks

have also recovered somewhat, and the market is showing signs of a reversal (momentum has declined). However, at this

point, we believe it is closer to a speed adjustment following the sharp rally than a loss of momentum in the Nikkei Average’s

upward trend. As a whole, momentum stocks, centered on AI semiconductor-related companies, remain the driving force

behind the rally, and lagging domestic demand and defensive stocks, as well as value-related stocks, appear to lack the

catalysts and narratives necessary to close the gap in any meaningful way. As a trading perspective ahead of the

rebalancing season at the end of June, we think it would be reasonable not to expect a large-scale return reversal, in

which the top- and bottom-performing stock groups completely reverse in terms of share price performance, but

rather to expect a situation in which strengths and weaknesses shift within each group based on valuations.

| Japan Post Insurance (7181) (Koki Sato) (7181 JP, OW)

Raising our rating to Overweight: Improving risk-reward outlook making it clearer that shares are

undervalued

We raise our price target through December 2026 from ¥1,467 to ¥1,790, and we raise our rating from Neutral to Overweight in

light of upside expansion. We had maintained a cautious stance, given somewhat lofty market expectations regarding