As trading ahead of NVIDIA's earnings in the US market raises expectations of buying back short positions, rebalancing is expected to focus on semiconductor and AI-related stocks in the Japanese market, potentially supporting the market's underlying strength. The previous day's trend in the New York market and movements in futures are expected to influence intraday trading.
The Japanese equity market on the 26th was expected to follow the lead of the US market, with investors likely to seek opportunities to buy semiconductor and AI-related stocks on dips. Gains in the Dow Jones Industrial Average and Nasdaq, together with lower crude oil prices, provided reassurance, and the Nikkei 225 was expected to trade modestly higher while investors watched futures movements.
Position-adjustment selling continued ahead of NVIDIA's earnings announcement, although there were indications that it may have run its course. In the Tokyo market, SoftBank Group Corp., Advantest, Kioxia Holdings and Tokyo Electron were among the large-cap stocks viewed as likely to attract rebalancing flows.
Although investors are likely to refrain from aggressive trading ahead of the earnings announcement, moves to bring short positions closer to neutral could support the market's overall firmness. Buying back short positions was a focus in the futures market, and movements in semiconductor and AI stocks could lead to index buying.