The Nikkei Average fell back after briefly recovering 70,000, while market attention has turned to upcoming earnings announcements in light of developments in the US market, intensifying competition in the DRAM sector and the results of the BOJ Tankan survey. The main focus for readers will be the acceleration of earnings announcements from next week onward.
The Nikkei Average recovered 70,000 on a closing-price basis on Tuesday, 6 October, before coming under heavy selling pressure through Tuesday, 13 October. Although the strength of the US market provided support, intensifying competition driven by technological innovation in China's DRAM sector has become a source of concern for the market. With issues including production challenges for new products and securing the supply chain also in play, market concerns are viewed as a somewhat excessive reaction.
In the BOJ Tankan survey released on Thursday, 1 October, the business conditions index for large manufacturers improved by 2 points from the previous survey to plus 24. This was its highest level since the March 2018 survey, with factors cited including entrenched inflation, the spread of AI and movements in crude oil futures.
Figure 2 shows the business conditions index for large companies by industry. Semiconductors and electronic components are classified under electrical machinery, while semiconductor manufacturing equipment is classified under production machinery. If the outlook in the September survey and the latest readings show improvement, there is a view that the outlook could also improve in the December survey.
In the US market, earnings announcements for the July–September 2026 quarter will gather pace, while in Japan, announcements by major companies are expected to follow DISCO CORPORATION's results around 22 October. Some believe the earnings announcements could change the direction of the market.