Week ahead: Domestic earnings season peaks, focus on Kioxia and 'Physical AI'

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Fri May 8, 2026 5:48 pm JST Market

The Nikkei Stock Average shed 120 yen to end at 62,713 yen on May 8, paring back some of the previous day's gains. SoftBank Group Corp. <9984> declined, dragging down the Nikkei by over 230 yen alone. However, following the previous day's record gain of 3,320 yen?the largest single-day increase in history?the decline remained modest despite potential pullback pressure. Trading value hit 10,963 billion yen, marking another day of heavy turnover.

TOYOTA MOTOR CORPORATION <7203> projected a 20% decline in operating profit for the fiscal year ending March 2027 in its afternoon earnings announcement, sending its shares lower. However, the broader market impact was limited. "TOPIX has yet to surpass its late February highs. The muted reaction to TOYOTA's decline is symbolic of current market conditions," noted an analyst.

The primary focus remains the sustainability of the concentrated rally in AI and semiconductor-related stocks. Tech-centered trading, driven by the U.S. market, is expected to persist. A major securities firm forecasts EPS growth of 9% for Dow Jones Industrial Average components for the fiscal year ending December 2026, while the Nasdaq Composite Index is expected to see 33% EPS growth. For the fiscal year ending December 2027, the Dow is projected to grow 13%, compared to 22% for the Nasdaq. Strong profit growth in tech continues to drive the performance gap between the two indices, a trend reflected in the Nikkei's record highs given its heavy tech weighting.

Next week marks the peak of the domestic earnings season. Notable releases include Furukawa Electric Co., Ltd. <5801> on May 12, SoftBank Group on May 13, and Kioxia Holdings Corporation <285A> on May 15. Investor interest in Kioxia remains high amid heavy trading. While the company provides quarterly guidance, the market expects full-year EPS for the fiscal year ending March 2027 to reach approximately 4,000 yen, compared to the 900 yen forecast for the fiscal year ending March 2026. Kioxia's results are expected to significantly influence overall market sentiment.

Expectations for "Physical AI" are also rising, with FANUC CORPORATION <6954> and KEYENCE CORPORATION <6861> hitting record highs, while YASKAWA Electric Corporation <6506> also gained. Whether Physical AI can become a major market driver remains a key focus. Furthermore, U.S. President Trump is slated to visit China on May 14-15 for a summit. Markets will closely monitor developments in Iran alongside the meeting.

Other key international events include U.S. existing home sales on May 11, the Consumer Price Index (CPI) on May 12, and the Producer Price Index (PPI) on May 13. Retail sales are due on May 14, followed by the New York Fed manufacturing index and industrial production on May 15. Federal Reserve Chair Powell's term also expires on May 15. Major U.S. earnings include Cisco Systems on May 13 and Applied Materials on May 14.

Domestic highlights include the BOJ's Summary of Opinions on May 12, the Economy Watchers Survey on May 13, and money stock data on May 14. Key earnings announcements include IBIDEN CO.,LTD. <4062>, JX Advanced Metals Corporation <5016>, and Sumitomo Metal Mining Co., Ltd. <5713> on May 11; SHIMIZU CORPORATION <1803> and Panasonic Holdings Corporation <6752> on May 12; NIPPON STEEL CORPORATION <5401> and Mitsui Fudosan Co., Ltd. <8801> on May 13; TAISEI CORPORATION <1801>, Fujikura Ltd. <5803>, and SMC CORPORATION <6273> on May 14; and Recruit Holdings Co.,Ltd. <6098>, Mitsubishi UFJ Financial Group, Inc. <8306>, and Daiichi Life Group, Inc. <8750> on May 15. The Nikkei is expected to trade between 61,200 yen and 63,500 yen next week.

Source: MINKABU PRESS

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