Tokyo Market Summary: Nikkei Average Continues to Grow Significantly, AI Will Lead to Inflation First, and Then Deflation - JP Morgan Executives

Top news
¥153 yen Tennozan's “US CPI match” is military to Kanda Treasurer
At the Tokyo Foreign Exchange Market on the 16th, the yen exchange rate against the dollar hit the 153 yen range. The US price index showed a slowdown in inflation, and high pressure on the dollar declined. In the market, attention is once again drawn to the ability of Treasurer Kanda Masato, who leads exchange intervention. This is because the Ministry of Finance did not approve it, but it seems that yen buying intervention was carried out at a timing when the US economic indicators were declining one after another, and the depreciation of the yen was stopped. The “victory” following the 2022 offensive and defensive has also come into view.
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AI first causes inflation and then causes deflation—JP Morgan executive
As artificial intelligence (AI) spreads around the world, will inflation or deflation progress? According to JPMorgan Chase's new global co-head of sales and research, the answer is both. Julie said, “Everything that will be needed in the future, such as infrastructure, electricity, CPUs, transmission grids, etc., will be a factor of inflation.” After that, he predicted that deflation would occur as companies became more efficient using AI, and added, “From my point of view, this happens on a yearly basis.”

The Japanese economy has not grown for 3 consecutive terms, and there is also a view that it is “stagflationary”
The Japanese economy fell into negative growth in the January-March period, and growth has not been seen for 3 consecutive terms. While private consumption continues to be sluggish due to high prices, there is also a view that it is already entering a state of “stagflation (inflation under economic stagnation).”

Notable stocks
Mitsubishi UFJ fell over 5% at one point, aware that the stock repurchase with an upper limit of 100 billion yen was unsatisfactory
$Mitsubishi UFJ Financial Group(8306.JP)$It continued to drop drastically, and the rate of decline exceeded 5% at one point. After the transaction ended on the 15th, in line with the announcement of consolidated financial results for the fiscal year ending March 24, it was announced that the total number of shares acquired is 80 million shares (0.68% of the total number of issued shares excluding treasury stock) and the total acquisition amount is 100 billion yen as an upper limit. It looks like the purchase amount was reduced compared to the company stock buyback with an upper limit of 40 billion yen announced in November last year, and sales by investors who accepted that it was unsatisfactory increased.

Recruit's stock price is year-to-date high, and financial details support it
$Recruit Holdings(6098.JP)$It has continued to grow for 3 days. It rose to 7557 yen, which was 6.94% higher at one point, breaking the year-to-date high. On the 15th, it was announced that consolidated net profit (international accounting standards) for the fiscal year ending 2025/3 (current fiscal year) will decrease 11% to 13% from the previous fiscal year to 315 billion to 400 billion yen. The median range value (357.5 billion yen) shown by the company slightly exceeds the QUICK consensus's 345.7 billion yen (as of 13th, 14 companies), which is the market forecast average. It seems that evaluations of generally strong performance are inviting buyers.

Renesas president wants to increase sales ratio in India to around 10% around 2030
$Renesas Electronics(6723.JP)$President Shibata Hidetoshi stated at the business briefing session on the 16th that attacking the Indian market is a “very big theme,” and expressed the idea that he would like to raise the Indian sales ratio as a share of overall sales to about 10% around 2030.