Tokyo Market Summary: Nikkei Average Rose Sharply – Ishikawa Seisakusho Surged, Constitutional Reform Sentiment Attracts Funds to Defense-Related Stocks – Sansan Rose Sharply as US Software Stocks Boosted Buybacks in SaaS-Related Names – Furukawa Electric Up 22%, Optical Business Expands Profits

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Market Overview
On the 10th, the Nikkei average rose sharply for the third consecutive day. The closing price was up 1,286 yen at 57,650 yen. Following a favorable response to the rise in US stocks, trading began with an increase of over 500 yen and continued to climb higher for some time. $SoftBank Group (9984.JP)$ Led by major large-cap stocks, upward momentum strengthened when the index reached four digits, expanding gains to over 1,500 yen by mid-morning. Buying slowed as it approached 58,000 yen, and thereafter upward pressure eased. In the afternoon session, with a market holiday approaching the next day, a wait-and-see stance strengthened. Nevertheless, the market did not lose significant steam, closing with a four-digit gain.

The trading volume on the Tokyo Stock Exchange Prime Market was approximately 9.67 trillion yen. By sector, non-ferrous metals, other financials, and real estate rose, while air transportation, food products, and fisheries/agriculture/forestry fell. Companies that raised their full-year operating profit forecasts... $Mazda Motor (7261.JP)$ Companies that raised their forecasts surged in the afternoon session. On the other hand, companies projecting reduced profits for the current term... $Nisshinbo Holdings (3105.JP)$ plummeted in the afternoon session.

[Today's Buy/Sell Dominance Situation]

In the Tokyo Stock Exchange Prime Market on February 10, the buy-dominant amount was 1.65 trillion yen, while the sell-dominant amount was 1.5 trillion yen.

Top News
IHI - Gains narrow in the afternoon session; 3Q cumulative operating profit down 1%, missing consensus
$IHI (7013.JP)$ Shares rose slightly in the afternoon session. The company announced at 1:00 PM on the 10th that its consolidated operating profit (IFRS) for the third quarter cumulative period (April-December) of fiscal year 26.3 was ¥102.5 billion (a 0.9% decrease year-over-year). Market consensus was ¥112.6 billion.

Cumulative orders for the third quarter reached ¥1,364.8 billion, marking a record high for the period due to increased demand in the nuclear and other energy sectors. However, revenue and operating profit declined slightly due to the impact of large-scale projects from the same period last year.

Mitsui E&S - Buy and sell orders mixed; full-year operating profit revised upward; 3Q cumulative up 2.3x
$Mitsui E&S (7003.JP)$ Shares fluctuated between buying and selling. On the 10th, the company announced an upward revision of its full-year consolidated operating profit forecast for fiscal year 26.3 from ¥30 billion to ¥35 billion (a 51.3% increase compared to the previous term). Market consensus was ¥38.7 billion.

Projects in marine propulsion systems and logistics systems with relatively good profitability are proceeding as planned. Cost reduction effects also contributed. The assumed exchange rate was revised from ¥145 to ¥150 per dollar.

Consolidated operating profit for the third quarter cumulative period (April-December) of fiscal year 26.3 was ¥31.1 billion (2.3 times higher year-over-year). In addition to increased sales, profitability improved in the marine propulsion systems and logistics systems businesses.

In addition, the company announced a revision of its forecast for the fiscal year-end dividend for fiscal year 26.3 from undecided to ¥35 (previous year-end was ¥20). The annual dividend forecast is now undecided to ¥50 (previous year was ¥20).

Ishikawa Seiki's stock price surged significantly for the third consecutive day, driven by a 90% increase in operating profit for the October-December period and growing interest in defense-related stocks amid rising momentum for constitutional reform.
$Ishikawa Seisakusho (6208.JP)$ Stocks surged significantly for three consecutive days, hitting a new yearly high. In the House of Representatives election held on the 8th, the Liberal Democratic Party secured more than two-thirds of the seats, marking a historic victory. Prime Minister Sanae Takaichi indicated her intention to pursue constitutional reform during a press conference on the evening of the 9th, which has been supportive for defense-related stocks.

Additionally, Ishikawa Seisakusho announced its consolidated financial results for the third quarter cumulative period (April-December) of fiscal year 26 after the close of trading on the 9th. Sales increased by 11.8% year-over-year to ¥11.655 billion, and operating profit increased by 65.2% to ¥910 million, achieving double-digit growth in both revenue and profit. Operating profit for the October-December period grew by 90%, and positive evaluations of the momentum for expanding profits led to investment inflows.

Furukawa Electric --- Continues to rise sharply as profit growth from optical-related products and increased dividends are being evaluated
$Furukawa Electric (5801.JP)$ Shares continued to soar significantly. After announcing earnings in the afternoon session the previous day, shares surged to the upper limit, and further gains were seen today. The operating profit forecast for fiscal year 26 was revised upward from ¥53 billion to ¥56 billion, an 18.9% increase year-over-year. The automotive and ICT segments were raised. The annual dividend was also increased from ¥120 to ¥160. Particularly, it appears that rapid profit growth is expected in the highly anticipated optical products segment in the second half of the fiscal year, leading to stronger positive reactions.

Sansan—shares surged significantly following positive sentiment from the rise in US software stocks. Buying interest returned to SaaS-related stocks.
$Sansan (4443.JP)$ Shares surged significantly. The rise in US software stocks is being well received.

In the US market yesterday, software stocks were bought, with Microsoft rising 3%. Salesforce also performed solidly, and Oracle surged nearly 10% after an analyst upgraded its investment rating. Following this trend, domestic SaaS-related stocks, which had seen selling due to concerns that AI might replace services, are seeing a rebound in buying.

$Money Forward (3994.JP)$ 、 $Infomart (2492.JP)$ 、 $OBIC Business Consultants (4733.JP)$ 、 $Appier Group (4180.JP)$ 、 $Rakus (3923.JP)$ 、 $Cybozu (4776.JP)$ Other related names are also trading higher.

[Stocks to Watch] Mitsubishi Estate surges significantly = Share buyback is well-received
$Mitsubishi Estate (8802.JP)$ The stock surged significantly. It rose to 4,935 yen, up 469 yen from the previous day at one point. The additional share repurchase program announced alongside earnings on the 9th — up to 30 billion yen for 13 million shares (1.07% of total issued shares) — seems to be well received.

According to the company, the total share repurchase for the fiscal year 2025, including this additional amount, is expected to reach 130 billion yen. Market sources indicate that the company has explained its desire to achieve its ROE (Return on Equity) target of 10% by 2030 ahead of schedule (major securities firm), and the change in management attitude towards improving capital efficiency is also being positively evaluated (same source).

The April-December 2025 performance forecast announced alongside the share buyback shows increased revenue and profit. The profit forecast for the fiscal year ending March 2026 was revised upward but was in line with market expectations (same source). (3:03 PM)

Sumitomo Metal Mining - MS&Co. raises target price; Strengthened return policy viewed positively, market conditions remain favorable
$Sumitomo Metal Mining (5713.JP)$ The stock is performing solidly. Morgan Stanley MUFG Securities points out that the strengthened return policy is positive, and market conditions are favorable. They maintained their investment rating at 'Equal-weight' while raising the target price from 4,150 yen to 10,700 yen.

Morgan Stanley revised its earnings forecast. Starting from fiscal 2026, it raised its market condition assumptions to copper at 600 cents/lb, gold at $4,700/toz, nickel at $7.5/lb, cobalt at $25/lb, and exchange rate at 155 yen/USD based on Mark to Market. PBT (Profit Before Tax) forecasts have been revised to 217 billion yen from 126 billion yen for FY2025, 300 billion yen from 144.5 billion yen for FY2026, and 300 billion yen from 146.5 billion yen for FY2027. Depending on market conditions, if current conditions persist, next fiscal year’s consensus could rise significantly. The strengthened return policy is also viewed positively. However, the stock price has risen sharply so far, and most of the positive earnings factors have already been priced in.

[Top Moving Japanese Stocks]
The constituent stocks of the Nikkei 225 generally rose, reflecting improved market sentiment. Amid this...$Furukawa Electric (5801.JP)$The stock ranked first in terms of daily gains, closing at 21,500.0 yen, up 22.86%.

On the other hand, the stock with the largest decline was$Renesas Electronics (6723.JP)$The closing price fell 3.88% to 2982.5 yen.

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Source: MINKABU, FISCO, Trader's Web, Stock Newspaper, Jiji Press

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