The Nikkei 225's forecast EPS has risen, while strong earnings have broadened beyond AI and semiconductor-related stocks. The close in the third week of August was ¥66,016.36, down approximately ¥2,700 from the previous Friday, marking a weekly decline.
The Nikkei 225 closed at ¥66,016.36 on Friday, 21 August, down ¥2,697.44 from the previous Friday (-3.93%) and posting a weekly decline. AI and semiconductor-related stocks led at the start of the week, but lost momentum against a backdrop of heightened tensions in the Middle East and rising interest rates in Japan and the US.
The fourth week of August began with the Nikkei 225 at ¥65,528.09 (-0.74%). With Nvidia's earnings and the Jackson Hole meeting scheduled for 26 August, investors focused on the possibility of increased volatility, particularly in AI and semiconductor-related stocks. By performance among Nikkei 225 constituents, marine transport and resource stocks rose, while electronic component and semiconductor-related stocks were relatively weak in some trading sessions.
Forecast EPS for the Nikkei 225 rose from ¥2,697 at the end of March to ¥3,922 at the end of June, recovering to ¥3,919 on 17 August. Forecast net income for the fiscal year ending March 2027 has been revised upward from an initial estimate of a 5% increase, with estimates showing that 20% of companies have raised their forecasts. Earnings releases have strengthened the fundamental support for the market, with the breadth of stocks reporting strong earnings standing out as a key feature.
As strong earnings have broadened across the market, major companies reported notable increases in profit, including Toyota Motor, whose net income rose 75.6% year on year to ¥1.477 trillion, Honda, up 129.3%, Advantest, up 93.8%, and Tokyo Electron, up 39.5%. Among semiconductor-related companies, Kioxia and Shin-Etsu Chemical also remained firm, while the energy and trading company sectors maintained high levels of profit growth.