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

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

Gan & Lee Pharmaceuticals / Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment</li>
<li>Short-Term supports to watch on ACWI-US continue to be $132 (testing now), $130, $128, $125-$126, and $123-$123.50. All signs point to the ACWI-US uptrend continuing for the foreseeable future.</li>
<li>Upgrading China to Overweight; Europe Breaking Out; Japan Also Remains Attractive. Buys in Consumer Discretionary (primarily autos/parts), Industrials, Services, Health Care, Materials, Financials, and Real Estate</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment
Short-Term supports to watch on ACWI-US continue to be $132 (testing now), $130, $128, $125-$126, and $123-$123.50. All signs point to the ACWI-US uptrend continuing for the foreseeable future.
Upgrading China to Overweight; Europe Breaking Out; Japan Also Remains Attractive. Buys in Consumer Discretionary (primarily autos/parts), Industrials, Services, Health Care, Materials, Financials, and Real Estate


Upgrading China to Overweight; Europe Breaking Out

Shanghai Stock Exchange Composite Index / Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).</li>
<li>We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 5700-5785 and $119-$121.</li>
<li>$125-$126 and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 5700-5785 and $119-$121.
$125-$126 and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.


China and Japan Breaking Out -- Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Defense related plays stronger as the potential for US direct involvement in Iran grows...watch heavies for more upside.</li>
<li>Kioxia squeeze unlikely to last now lock-up expiry now past.</li>
<li>Nintendo back at the highs, but with record sales already priced in and Switch2 sold out a correction from here looks likely.</li>
</ul>


Defense related plays stronger as the potential for US direct involvement in Iran grows...watch heavies for more upside.
Kioxia squeeze unlikely to last now lock-up expiry now past.
Nintendo back at the highs, but with record sales already priced in and Switch2 sold out a correction from here looks likely.


Japan Morning Connection: Risk-Off Tape Unlikely to Last with Regime Change the Most Likely Outcome

<ul>
<li>NVDA numbers were inline, but Blackwell rollout and outlook for further sovereign expansion sets bullish tone.</li>
<li>HP numbers point to bleak demand for PC's due to rising import costs and a slower economy</li>
<li>Rohm +13% as its switches to a more AI focused bucket + NKY potential.</li>
</ul>


NVDA numbers were inline, but Blackwell rollout and outlook for further sovereign expansion sets bullish tone.
HP numbers point to bleak demand for PC's due to rising import costs and a slower economy
Rohm +13% as its switches to a more AI focused bucket + NKY potential.


Japan Morning Connection: NVDA Numbers and Tariffs Blocked by US Trade Court Sending Futures Higher

Japan

Mitsubishi Electric Corporation develops, manufactures, and markets electronic equipment.  The Company's products include industrial machinery, heavy electric machinery, data communications systems, electronic devices, and consumer electronics.

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Mitsubishi Electric (6503 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

Upgrading China to Overweight; Europe Breaking Out

Upgrading China to Overweight. Europe Breaking Out. Japan Remains Attractive. All signs point to the $ACWI uptrend continuing for the foreseeable...

Vermilion Research

China and Japan Breaking Out -- Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak

China's Shanghai Composite and Japan's TOPIX and TOPIX Small indexes Breaking Out -- Buy; Bullish Outlook Intact on global equities $ACWI; U.S....

Vermilion Research

Japan Morning Connection: Risk-Off Tape Unlikely to Last with Regime Change the Most Likely Outcome

Pressure on US homebuilders with crackdowns on undocumented workers. Nintendo may face correction from its highs as sales for new console are...

Andrew Jackson

Japan Morning Connection: NVDA Numbers and Tariffs Blocked by US Trade Court Sending Futures Higher

Rohm +13% after news that it will be manufacturing chips for AI servers and potential NKY inclusion. HP dropping due to concerns over rising import...

Andrew Jackson

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

Upgrading China to Overweight; Europe Breaking Out

Upgrading China to Overweight. Europe Breaking Out. Japan Remains Attractive. All signs point to the $ACWI uptrend continuing for the foreseeable...

Vermilion Research

China and Japan Breaking Out -- Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak

China's Shanghai Composite and Japan's TOPIX and TOPIX Small indexes Breaking Out -- Buy; Bullish Outlook Intact on global equities $ACWI; U.S....

Vermilion Research

Japan Morning Connection: Risk-Off Tape Unlikely to Last with Regime Change the Most Likely Outcome

Pressure on US homebuilders with crackdowns on undocumented workers. Nintendo may face correction from its highs as sales for new console are...

Andrew Jackson

Japan Morning Connection: NVDA Numbers and Tariffs Blocked by US Trade Court Sending Futures Higher

Rohm +13% after news that it will be manufacturing chips for AI servers and potential NKY inclusion. HP dropping due to concerns over rising import...

Andrew Jackson

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