Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. PCE Deflator 3.0%YoY; 0.2%MoM calms (re)inflation fears; Yields fall,  Equities rebound as Goldilocks View of Economy/Markets intact; SPX 2Q earnings not so bad; China further moves to bolster economy; </li>
<li>JAPAN. NKY Futures 1% vs Cash; USDJPY 141.2; BOJ Tweaks - 0.5% JGB10Y  yield now a reference, not a ceiling; To buy bonds at 1%.; Next inflation forecast 1.9%=continued easing</li>
<li>NUGGET. Nidec-Renesas Partnership potentially a big deal for both companies. Successful execution will lead to sales and profit growth for both companies in their respective areas.</li>
</ul>


OVERSEAS. PCE Deflator 3.0%YoY; 0.2%MoM calms (re)inflation fears; Yields fall,  Equities rebound as Goldilocks View of Economy/Markets intact; SPX 2Q earnings not so bad; China further moves to bolster economy; 
JAPAN. NKY Futures 1% vs Cash; USDJPY 141.2; BOJ Tweaks - 0.5% JGB10Y  yield now a reference, not a ceiling; To buy bonds at 1%.; Next inflation forecast 1.9%=continued easing
NUGGET. Nidec-Renesas Partnership potentially a big deal for both companies. Successful execution will lead to sales and profit growth for both companies in their respective areas.


Ohayo Japan|Benign PCE Deflator Spurs Equities; BOJ Easing to Continue: Nidec+Renasas = A Big Deal

Equity Bottom-Up

<ul>
<li>Fanuc reported 1Q3/24 operating profit of ¥32.6 billion (-26.3% YoY), missing street expectations at around ¥43 billion</li>
<li>Fanuc cut full year guidance for operating profit to ¥118 billion (-38% YoY), way below street estimates of ¥176 billion</li>
<li>Turning bearish. We think the stock will essentially tread water given lack of catalysts over next 6-9 months and valuations</li>
</ul>


Fanuc reported 1Q3/24 operating profit of ¥32.6 billion (-26.3% YoY), missing street expectations at around ¥43 billion
Fanuc cut full year guidance for operating profit to ¥118 billion (-38% YoY), way below street estimates of ¥176 billion
Turning bearish. We think the stock will essentially tread water given lack of catalysts over next 6-9 months and valuations


Fanuc (6954) | Earnings Miss; Guidance Slashed

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Global equities (MSCI ACWI) have marginally broken above the top-end of our anticipated 2023 trading range of $93 on ACWI-US.</li>
<li>In our 4/18/23 Int’l MacroVision we acknowledged that a break above $93 and a reach to $96-$97 was also possible – and so far, this is what has played out.</li>
<li>We will continue to watch the $93 level for a potential false breakout, but as long as the ACWI-US is above $90.50, we cannot be bearish.</li>
</ul>


Global equities (MSCI ACWI) have marginally broken above the top-end of our anticipated 2023 trading range of $93 on ACWI-US.
In our 4/18/23 Int’l MacroVision we acknowledged that a break above $93 and a reach to $96-$97 was also possible – and so far, this is what has played out.
We will continue to watch the $93 level for a potential false breakout, but as long as the ACWI-US is above $90.50, we cannot be bearish.


MSCI EM Improving; Buys in Value & Large-Cap EM; Remain Overweight Japan, India, Taiwan, and Greece

<ul>
<li>OVERSEAS. NDX100 +1.8%  SOX +3.3% vs. SPX +0.9% DOW +0.6%; Tech back ahead of Fed; Energy a different story as Oil fell on D-S worries; All eyes remain on CPI/Fed</li>
<li>JAPAN. NKY Futs +0.7% premium vs Cash; Japan lead yesterday vs US..rarity; Expect continued Equity follow through; Seino HD(9076) -Massive Buyback, Div hike; TOYOTA-Path to Solid State Battery Commercialization?</li>
<li>NUGGET. Nidec Succession Resolution in Sight, but Nagamori Premium May Dissappear</li>
</ul>


OVERSEAS. NDX100 +1.8%  SOX +3.3% vs. SPX +0.9% DOW +0.6%; Tech back ahead of Fed; Energy a different story as Oil fell on D-S worries; All eyes remain on CPI/Fed
JAPAN. NKY Futs +0.7% premium vs Cash; Japan lead yesterday vs US..rarity; Expect continued Equity follow through; Seino HD(9076) -Massive Buyback, Div hike; TOYOTA-Path to Solid State Battery Commercialization?
NUGGET. Nidec Succession Resolution in Sight, but Nagamori Premium May Dissappear


Ohayo Japan |BIG TECH BACK ! NUGGET: Nidec Succession Headaches-Resolution in Sight But...

<ul>
<li>OVERSEAS. SPX Rally continues with further Tech gains; White House call for tighter Bank regulations; Trump indicated for hush money payment;  US SEC seeking to ramp up Cryto oversight</li>
<li>JAPAN. NKY Futs +0.6% vs Cash; USDJPY 132.7; JP Equities to close quarter with &gt;6% gains; TSE ramps up rhetoric againsts low PBR stocks; GIC lifts JP investment; Citadel Back </li>
<li>NUGGET.  BayCurrent, - exploiting Japan's Digital and Salary Gaps. With inflation rising in Japan, we expect increased DX spending and more skilled IT professionals to join BayCurrent. We remain bullish.</li>
</ul>


OVERSEAS. SPX Rally continues with further Tech gains; White House call for tighter Bank regulations; Trump indicated for hush money payment;  US SEC seeking to ramp up Cryto oversight
JAPAN. NKY Futs +0.6% vs Cash; USDJPY 132.7; JP Equities to close quarter with &gt;6% gains; TSE ramps up rhetoric againsts low PBR stocks; GIC lifts JP investment; Citadel Back 
NUGGET.  BayCurrent, - exploiting Japan's Digital and Salary Gaps. With inflation rising in Japan, we expect increased DX spending and more skilled IT professionals to join BayCurrent. We remain bullish.


Good Morning Japan |Tech Bid; Trump Indicated; NUGGET: BayCurrent-Japan's Digital/Salary Gap Winner

Japan

FANUC CORPORATION manufactures factory automation (FA) systems and equipments, and robots. The Company's products include computerized numerically-controlled (CNC) equipment, servo motors, laser systems, industrial robots, wire-cut electric discharge machines, and CNC drill.  Fanuc participates in a joint venture with General Electric in the FA field.

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Fanuc Corp Unsp Adr (FANUY US)

Ohayo Japan|Benign PCE Deflator Spurs Equities; BOJ Easing to Continue: Nidec+Renasas = A Big Deal

US Equities rebound as confidence grows in Golilocks trade; NKY Futures 1% vs Cash; USDJPY 141.2; BOJ Tweaks -To buy 10 year bonds at 1%.; Next...

Mark Chadwick

Fanuc (6954) | Earnings Miss; Guidance Slashed

Our long-term investment thesis sees Fanuc as a key beneficiary of the de-globalization of supply chains and EV capex. However, we need to wait for...

Mark Chadwick

MSCI EM Improving; Buys in Value & Large-Cap EM; Remain Overweight Japan, India, Taiwan, and Greece

MSCI EM Improving; Buys in Value & Large-Cap EM $TSM #Samsung $BABA; Remain Overweight Japan, India, Taiwan, and Greece. $ACWI break above $93 and...

Vermilion Research

Ohayo Japan |BIG TECH BACK ! NUGGET: Nidec Succession Headaches-Resolution in Sight But...

Tech Back as US Equities Well Bid; NKY Futs +0.7% premium vs Cash; ; Seino HD(9076) - Massive Buyback, Div hike; TOYOTA - Sees path to Solid State...

Mark Chadwick

Good Morning Japan |Tech Bid; Trump Indicated; NUGGET: BayCurrent-Japan's Digital/Salary Gap Winner

SPX up as Tech rally continues; Trump indicated; IN Japan , Equities to close quarter with >6% gains; TSE ramps up rhetoric againsts low PBR...

Mark Chadwick

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