JAPAN FIRST TO MARKET

Research evidence excerpt

JAPAN FIRST TO MARKET

Asia Pacific Equity Research

Japan First to Market 08 July 2026

Top Stories

Japan Quant Strategy (Masanari Takada)

Real and imaginary aspects of seasonal reversals: If “this time is different,” then a Goldilocks-style

Momentum market lies ahead

In the Japanese stock market, the correction in Momentum stocks, mostly of semiconductors and electronic components-

related companies, that has been ongoing since last week continues. At the same time, Value and Quality stocks, which had

initially lagged, continue to see buying interest. Since these Momentum stocks, which have been the market driver from early

spring through June, have rapidly entered corrective territory, there has been no major change in this composition so far.

Consumer/Industrial Electronics: Earnings Outlook (Apr-Jun) (Junya Ayada)

Focus on gap between fundamentals and AI-related expectations/concerns

We summarize key points ahead of Apr-Jun results. AI exposure has had a large impact on share price performance over the

past three months, and we think one focus point in Apr-Jun results will be verification of the gap between fundamentals and AI-

related expectations and concerns. Share prices have been largely sluggish despite overall upward revisions of our earnings

outlooks for the six main companies (Hitachi, Mitsubishi Electric, NEC, Fujitsu, Panasonic HD, Sony Group) in the sector, and

we see plenty of room for stocks to be rerated if strong earnings momentum is confirmed. We highlight Hitachi (6501),

Mitsubishi Electric (6503), and Sony Group (6758).

Semiconductor/Tech Materials: Earnings Outlook (Apr-Jun) (Mio Shikanai)

Watch WFE and pricing for semiconductors, semi-related for glass, and non-domestic for cement