The Tokyo stock market rebounded on Monday, 20th, with the Nikkei Stock Average rising 348 yen to 58,824 yen from previous day. While the market continues to react to news flow surrounding the Middle East, focus is shifting to the post-crisis landscape. Should a ceasefire and the reopening of the Strait of Hormuz materialize, stock prices in both Japan and US would likely surge, though the market already shows signs of independent momentum.

The Nasdaq Composite Index’s 13-day winning streak in US equity markets has been driven by AI and semiconductor-related stocks. The Philadelphia Semiconductor Index (SOX) has also risen for 13 consecutive sessions, hitting new highs. The AI data center boom is buoyed not only by its insulation from geopolitical risks but also by strong tailwinds from defense demand under the dual-use concept.

In Tokyo, capital is flowing into fast-moving small- and mid-cap stocks, previously categorized as speculative themes. These inflows differ from institutional investors buying blue-chip stocks out of "risk of not holding." However, if risk-on sentiment persists, a return reversal will likely manifest in small- and mid-cap stocks that trailed blue chips, a trend mirrored by the Russell 2000 reaching record highs in the US.

Focus has sharpened on the convergence of AI and robotics, or "physical AI." The recent humanoid robot marathon in Beijing attracted global attention, with the winning robot significantly breaking human records. Today’s Tokyo market saw this event act as a catalyst for investment capital.

Speculative capital is targeting small- and mid-cap theme stocks. KIKUCHI SEISAKUSHO CO.,LTD. <3444> hit its daily limit up for the third consecutive day at 1,449 yen. Its market capitalization expanded 1.7 times since late last week to nearly 18 billion yen. For firms with niche-top strengths, market cap often takes precedence over P/E ratios. Today, HEPHAIST Co., Ltd. <6433> was bought up to its daily limit, while TECHNO HORIZON CO.,LTD. <6629> continued its sharp rise, gaining up to 27% at one point. Hephaist has a market cap in the 13 billion yen range, while Techno Horizon stands around 26 billion yen.

New stocks to watch in the AI-robotics space include COMPUTER INSTITUTE OF JAPAN,LTD. <4826>, which handles contract development for NTT Data and HITACHI, LTD. <6501>. FUTURE INNOVATION GROUP, INC. <4392>, focusing on AGVs and drones, also warrants attention as its chart improves. Other potential gainers include DIGITAL MEDIA PROFESSIONALS INC. <3652> and GDEP ADVANCE,INC. <5885>. Additionally, MEAQ Inc. has seen its technology adopted for AI security robot platforms. UPR CORPORATION <7065> remains a dark horse with its deployment in assist suits and logistics IoT. With Kikuchi and CYBERDYNE,INC. <7779> gaining popularity, UPR’s relatively undervalued stock may attract capital.

Tomorrow’s schedule includes the BOJ’s April survey of lending attitudes and the Financial System Report. Batonz will list on the TSE Growth Market, while OBIC CO.,LTD. <4684> announces earnings. Overseas, the market awaits US retail sales, German ZEW sentiment, and the confirmation hearing for Fed nominee Waller. UnitedHealth Group is also set to release quarterly results.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.