Japan Weekly Kickstart

The report highlights strong North American net inflows into Japanese equities reaching a 13-year high and notes a shift toward a negative correlation between equities and JGB yields. While the FY3/26 earnings season saw 55% positive surprises, FY3/27 corporate guidance remains conservative relative to analyst consensus.

Key Takeaways

• 1.North American investors have been aggressive net buyers of Japanese equities, reaching the highest 3-month rolling total since May 2013 at ¥2tn.
• 2.The historical correlation between Japanese equities and bond yields has turned negative, where large yield moves now coincide with negative equity returns.
• 3.FY3/27 corporate guidance for TOPIX companies is notably conservative at +3% net profit growth compared to the consensus forecast of +9%.

Table of Contents

• Summary of the week
• Foreign flow breakdown update, rising JGB yields
• FY3/26 earnings summary
• Market Dashboard
• Strategy Focus
• Valuation/Performance
• Flows/Positioning/Earnings Momentum
• Style/Baskets
• Sector Performance/Revisions/Valuations
• Performance table (by sector)
• Best-Worst spread table (by sector)
• Top 10 performers in whole liquid universe
• Bottom 10 performers in whole liquid universe
• Top 10 overbought names in whole liquid universe
• Top 10 oversold companies in whole liquid universe
• Top 5 Performers (by sector)
• Bottom 5 Performers (by sector)
• Top 5 overbought names (by sector)
• Top 5 oversold names (by sector)
• Sector Dashboard
• Appendix One - Methodology

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