The Tokyo stock market on April 7th saw the Nikkei Stock Average edge up \15 to close at \53,429, marking a modest third consecutive day of gains. Trading remained subdued, with both buyers and sellers hesitant to make decisive moves, as the index ultimately settled just above the previous session's close. The market opened higher in the morning, led by futures buying, and continued to advance for approximately 15 minutes ? gaining around \500 and briefly bringing the \54,000 level into sight. However, once short-term short-covering subsided without follow-through from institutional buyers, the index drifted lower. The Nikkei firmed in late afternoon trading, but large sell orders during the closing auction pared the day's gains. While advancers accounted for just over 70% of all issues, gains among major stocks were largely mechanical, driven by index-linked buying tied to futures. The overall market atmosphere was far from the kind of dynamic conditions where bulls and bears engage actively.

The so-called "April anomaly" ? the Nikkei's monthly record of six gains and four losses over the past decade ? is not particularly compelling from a purely statistical standpoint. Yet April is widely recognized as a month that tends to attract aggressive buying from overseas investors. Over the past ten years through last year, foreign investors recorded net selling in the cash market only in 2020, posting net buying in all other years ? a 90% win rate. Notably, from 2022 to 2025, foreign investors were net buyers averaging approximately \1.5 trillion per April, reflecting substantial conviction. Based on these historical patterns, some market participants speculate that foreign investors may aggressively accumulate shares during any pullbacks this month.

It is worth recalling that last April saw volatile selling in early trading reminiscent of "Reiwa Black Monday" (August 2024), followed by an equally intense rebound. At the time, foreign investors sold futures heavily while simultaneously buying cash equities. Should a worst-case scenario materialize ? such as large-scale military strikes causing widespread damage to Iran's infrastructure ? markets would likely experience a sharp sell-off, though opportunistic buying would also be expected to emerge at those levels.

Turning to individual stocks, defense-related issues are naturally attracting buying interest, but the resilience of semiconductor-related stocks in the U.S. market is particularly noteworthy. In the prior U.S. session, major semiconductor names broadly displayed strength, albeit with some unevenness. The Philadelphia Semiconductor Index (SOX Index) rose modestly for a fourth consecutive session, maintaining its upward trajectory and decisively breaking above the 75-day moving average ? a key medium-term trend indicator. The SOX Index had been capped near the 8,000 level for approximately a month, but on this day climbed to 7,963 intraday (closing at 7,916), raising expectations for a decisive break through this resistance zone and a potential full trend reversal in the near term.

As one strategist at a mid-tier brokerage noted, "geopolitical risks have become a chronic headwind shared across global equity markets, but the semiconductor sector is perceived as relatively insulated from these concerns." AI and advanced semiconductor stocks are increasingly viewed as falling within the defense-related category. However, in the Tokyo market, large-cap names tend to be driven by index-linked futures buying, making aggressive positioning at current levels a low-expected-return strategy. Among major semiconductor equipment stocks today, Advantest <6857> held firm while Disco <6146> was sold off sharply, underscoring the continued difficulty in gauging market direction.

Against this backdrop, and as noted in the previous day's commentary, small- and mid-cap semiconductor-related stocks are increasingly demonstrating independent strength. Among names highlighted yesterday, THine Electronics <6769> showed signs of renewed activity, while Ishii Hyoki <6336> continued its upward trajectory despite forming an upper shadow, with the \1,000 level in sight. A&D Holon Holdings <7745>, which activist fund Strategic Capital continues to accumulate, is showing positive price action and appears likely to retest its year-to-date high of \2,865, with potential new highs beyond that. Hirata <6258>, which handles production facility engineering with semiconductor-related projects as a core revenue driver, also warrants attention. Beyond these names, contrarian opportunities appear to be emerging in semiconductor equipment-related stocks such as Towa <6315> and Marumae <6264>.

On the domestic data front, tomorrow's pre-market releases include February's Monthly Labour Survey, March's cross-border securities transactions, and February's balance of payments, with March's Economy Watchers Survey due during afternoon trading. Internationally, the Reserve Bank of New Zealand will hold its Monetary Policy Committee meeting to decide on interest rates, while the Reserve Bank of India is also scheduled to announce its policy rate decision. Poland's central bank will hold its Monetary Policy Committee meeting through the 9th. In Europe, attention will focus on Germany's February manufacturing orders and the Eurozone's February retail sales figures. In the U.S., the FOMC minutes from the March 17?18 meeting will be closely watched, alongside a 10-year Treasury note auction.

Source: MINKABU PRESS