Japanese equities investment strategy (July)

Research evidence excerpt

Japanese equities investment strategy (July)

Global Markets Research

Japanese equities investment strategy (July) 17 July 2026

EQUITY: JAPAN STRATEGY

Research AnalystsEntering results season with overconcentration concerns

Macro strategy

We raise our top-down earnings outlook, still expect modest rise in share Tomochika Kitaoka - NSC

prices tomochika.kitaoka@nomura.com

+81 3 6703 1815

Rotation accompanied by reversals amid concerns about overconcentration Masaki Motomura - NSC

Since the second half of June, the worldwide overconcentration in AI and semiconductor masaki.motomura@nomura.com

stocks and the isolated gain in the Nikkei 225 have paused, but in the first half of July the +81 3 6703 1119

TOPIX and European equities showed resilience, and we have observed rotation within Naoya Fuji - NSC

equities accompanied by reversals. AI and semiconductor demand remains strong, but we naoya.fuji@nomura.com

think the focus from 2026 H2 onwards will be on the sustainability of this demand and the +81 3 6703 1245

flow of funds associated with POs/IPOs. Momoko Nakada - NSC

Points to watch and scenarios ahead of results announcement season momoko.nakada@nomura.com

+81 3 6703 1100Active Japanese equity funds are seemingly entering earnings season heavily overweight

in AI and semiconductor stocks. FY26 Q1 recurring profit growth at companies with Tomoharu Kurosu - NSC

February or March year-ends already looks high, but we also see upside versus Q2 tomoharu.kurosu@nomura.com

+81 3 6703 3875consensus forecasts. In the near term, we expect a market marked by reversals as the

earnings reporting peak arrives from the last week of July through early August. Through Japan quantitative research

the end of July, we expect investors to remain concerned about overconcentration.