With the Nikkei 225 in view of the mid-¥70,000 range, attention is turning to Japanese companies that supply major semiconductor and electronic component makers in Japan, the United States, South Korea and Taiwan, against a backdrop of sustained and spreading AI-driven demand.
The Nikkei 225 is expected to reach ¥66,000 at the end of June, while the mid-¥70,000 range is also coming into view under the upside scenario. The backdrop includes excessive demand driven by the AI boom and supply-demand dynamics accompanied by FOMO psychology, with the sustainability and broader impact of the AI boom likely to be the focus going forward. Micron Technology's earnings on 24 June and earnings announcements by US and Japanese companies from July onward are expected to be key market catalysts.
A revaluation of Japanese equities by overseas investors could become a focus. Foreign investors had been tending to downgrade their view of Japanese equities since spring, but the stabilization of the situation in the Middle East and other factors could lead to renewed interest in lagging stocks. Hedge fund indices have been underperforming Japanese equities, while short positions in Nikkei 225 futures could also contribute to market volatility.
Attention is turning to Japanese companies that supply major semiconductor and electronic component makers. SoftBank Group, Kioxia Holdings, Murata Manufacturing, TDK, Ibiden, Taiyo Yuden, Tokyo Electron and Advantest, among others, reflect the AI and semiconductor cycle. Some Japanese companies have also been confirmed as suppliers to major semiconductor companies in South Korea and Taiwan. Japan's, South Korea's and Taiwan's major semiconductor companies are considered the main customers.
The performance of major suppliers tends to be linked to that of their customers, and strong earnings could have a knock-on effect on orders for intermediate goods and capital goods. In terms of share-price correlations, customer companies' share prices tend to lag the Nikkei Semiconductor Index and the share prices of their customers, and fine chemicals and other areas are considered likely to attract attention among lagging stocks.