Global Materials | Industrials | Commodities

Rahul Jain

Thematic (Sector/Industry)

<ul>
<li>Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.</li>
<li>Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.</li>
<li>Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.</li>
</ul>


Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.
Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.
Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.


Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Late session rally for chips and semi-cap names with the US signalling a softening of export curbs.</li>
<li>ARM numbers after the bell sending stock -10% point to Softbank missing todays upside.</li>
<li>Is Japanese shipbuilding expertise the new bargaining chip against tariffs? </li>
</ul>


Late session rally for chips and semi-cap names with the US signalling a softening of export curbs.
ARM numbers after the bell sending stock -10% point to Softbank missing todays upside.
Is Japanese shipbuilding expertise the new bargaining chip against tariffs? 


Japan Morning Connection: Rescinding of US Chip Restrictions to Send JP Semi Plays Higher

<ul>
<li>Disco guidance possibly showing front loading ahead of a potentially far bleaker 2Q.</li>
<li>US homebuilders strong after DR Horton reported strong GPM despite cutting guidance.</li>
<li>Trump re-raising the possibility of fees for Chinese vessels at US ports may be positive for non-Chinese ship builders.</li>
</ul>


Disco guidance possibly showing front loading ahead of a potentially far bleaker 2Q.
US homebuilders strong after DR Horton reported strong GPM despite cutting guidance.
Trump re-raising the possibility of fees for Chinese vessels at US ports may be positive for non-Chinese ship builders.


Japan Morning Connection: TSMC Fails to Hold Early Gains While Semi-Cap Plays Also Sag

<ul>
<li>Profit taking hit tech/semi's as tensions rapidly escalate in the Middle East, causing defense and oil related names to move higher</li>
<li>NEC remains overlooked as a defence play in Japan despite the MoD's growing for budget for electronic warfare and satellite defence capabilities</li>
<li>Renewables in the US are leading the way YTD, although Japan is far behind the curve despite PM Ishiba being a pro wind/solar and hawkish towards nuclear.</li>
</ul>


Profit taking hit tech/semi's as tensions rapidly escalate in the Middle East, causing defense and oil related names to move higher
NEC remains overlooked as a defence play in Japan despite the MoD's growing for budget for electronic warfare and satellite defence capabilities
Renewables in the US are leading the way YTD, although Japan is far behind the curve despite PM Ishiba being a pro wind/solar and hawkish towards nuclear.


Japan Morning Connection: NEC Overlooked as a Defence Play

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> September rebalance ended on 31 July. Nikkei has also confirmed <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a>'s capping at the rebalance.</li>
<li>The newly created Information &amp; Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.</li>
<li>The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended on 31 July. Nikkei has also confirmed Advantest Corp (6857 JP)'s capping at the rebalance.
The newly created Information &amp; Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.
The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.


Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

Japan

Mitsui E&S Holdings Co., Ltd. engineers, builds, and repairs ships.  The Company also manufactures industrial machinery and equipment and builds power plants.  Mitsui Engineering & Shipbuilding also operates information systems services and real estate business.

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Mitsui E&S Holdings (7003 JP)

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Rahul Jain

Japan Morning Connection: Rescinding of US Chip Restrictions to Send JP Semi Plays Higher

Upside for chips and semi-cap as US eases export curbs, poor outlook for Softbank as ARM drops 10%, Japanese shipbuilding expertise may be used as...

Andrew Jackson

Japan Morning Connection: TSMC Fails to Hold Early Gains While Semi-Cap Plays Also Sag

Disco may suffer from tough 2Q with AI spending nearing its peak, US homebuilders up after strong beat from DR Horton, Trump's fees on Chinese...

Andrew Jackson

Japan Morning Connection: NEC Overlooked as a Defence Play

Middle East tensions cause defense/oil stocks to rise; NEC undervalued in Japan defense sector; US leads in renewables, Japan lags behind despite...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

We forecast 3 changes for the NKY in Sep and highlight potential changes. The introduction of a new sector and a new rule changes things a bit and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

​Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Rahul Jain

Japan Morning Connection: Rescinding of US Chip Restrictions to Send JP Semi Plays Higher

Upside for chips and semi-cap as US eases export curbs, poor outlook for Softbank as ARM drops 10%, Japanese shipbuilding expertise may be used as...

Andrew Jackson

Japan Morning Connection: TSMC Fails to Hold Early Gains While Semi-Cap Plays Also Sag

​Disco may suffer from tough 2Q with AI spending nearing its peak, US homebuilders up after strong beat from DR Horton, Trump's fees on Chinese...

Andrew Jackson

Japan Morning Connection: NEC Overlooked as a Defence Play

Middle East tensions cause defense/oil stocks to rise; NEC undervalued in Japan defense sector; US leads in renewables, Japan lags behind despite...

Andrew Jackson

Nikkei 225 Index Rebalance Preview (Sep 2026): Potential Adds, Deletes, Capping & Other Changes

We forecast 3 changes for the NKY in Sep and highlight potential changes. The introduction of a new sector and a new rule changes things a bit and...

Brian Freitas

Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Disco may suffer from tough 2Q with AI spending nearing its peak, US homebuilders up after strong beat from DR Horton, Trump's fees on Chinese...