Key events to watch in October are compiled in light of Japanese equities' movements since the second half of September. The main focus will be the situation in the Middle East and oil trends, CPI releases, the outlook for rate hikes in Japan and the US, and the earnings release schedule.
Regarding the situation in the Middle East and oil trends, the view is that although the US-Iran conflict over the Strait of Hormuz continues, a sharp rise in oil prices will be avoided as long as supplies continue. If oil prices remain stable, expectations for rate hikes in Japan and the US are likely to recede, easing upward pressure on long-term interest rates, which could benefit Japanese equities.
The US is scheduled to release its September CPI on 14 October, and Japan is scheduled to release its CPI on 23 October. The monetary authorities in both countries are expected to assess oil prices and inflation trends carefully before deciding whether to raise rates. Sumitomo Mitsui DS Asset Management expects both Japan and the US to hold off on rate hikes in October, and sees no major turbulence for Japanese equities.
The interim earnings season for Japanese companies will begin in late October, with Shin-Etsu Chemical scheduled to report on the 27th, Advantest on the 28th and Tokyo Electron on the 30th. Despite continued uncertainty over the situation in the Middle East and rising costs, strong earnings continued in the previous fiscal year, and investors will focus on potential upward revisions to fiscal 2026 forecasts, as well as dividends and share buybacks.
The US earnings season will also begin around the same time, with the performance of the cloud businesses of AI- and semiconductor-related companies expected to be a particular focus. Microsoft, Alphabet and Meta are scheduled to report on 28 October, followed by Apple and Amazon.com on the 29th. In Europe and Asia, reports from ASML and TSMC are also due.