JAPAN FIRST TO MARKET

Research evidence excerpt

JAPAN FIRST TO MARKET

Asia Pacific Equity Research

Japan First to Market 26 June 2026

Top Stories

Japan Quant Strategy (Masanari Takada)

Offshore investors shifting from China to Japan+Momentum accelerates amid additional reversal

risk

The Nikkei Average recovered to 72,000 today (June 25). Earlier this week the index briefly dipped below 70,000, but market

sentiment rapidly rebounded following the release of earnings reports from major US semiconductor companies. This reflects

the rapid rate in which the market fluctuates and also suggests that Momentum, centered on AI-related stocks, remains

resilient. Overseas passive funds, which have been generating forward-looking flows in line with this momentum, continue to

post net inflows (Figure1). It appears that the underlying support from supply and demand did not collapse significantly in the

recent adjustment phase.

Cross-sector (Insurance & Autos) (Koki Sato/Akira Kishimoto)

Elimination of cross-shareholdings between Toyota and financial institutions entering final phase

On June 24, Bloomberg confirmed that an off-exchange transaction of 70,371,800 shares in MS&AD Holdings (8725) had

taken place at ¥4,181 per share (6% discount to the closing price that day), while the June 25 Nikkei reported that this

transaction apparently comprised Toyota Motor’s (7203) entire stake in MS&AD. This is in line with points including that 1) the

number of shares sold is equal to the number of MS&AD trading units held by Toyota at end-March 2026, 2) MS&AD said at its

May IR briefing that it would implement supply and demand measures such as off-market transactions (based on sales to

institutional investors) involving the sale of its shares resulting from unwinding cross-shareholdings, and 3) the transaction