Group 1 - The core viewpoint indicates that economic growth in the US and East Asia is expected to slow in the coming months until policy stimulus measures drive recovery in early 2026 [1] - The Federal Reserve announced a 25 basis point reduction in the federal funds rate target range to 3.75% to 4.00% in October, with another expected cut in December [1] - Asian central banks are anticipated to further lower interest rates in 2025 and the first half of 2026, positively impacting the Asian economy and earnings until the second half of 2026 [1] Group 2 - Japan's GDP growth is expected to stagnate in Q3 and remain weak in Q4 due to declining exports and industrial production, although leading indicators suggest a rebound later in the year [2] - China's economic outlook for 2026 will be guided by new stimulus measures focusing on consumer subsidies and industrial investment, particularly in the technology sector [2] - India's economic activity indicators are at a turning point, with government fiscal stimulus measures expected to enhance growth in early 2026 [2] Group 3 - Stock and fixed income performance has been outstanding in 2025, with double-digit returns across various markets, leading to significantly higher stock valuations compared to the beginning of the year [3] - The investment team remains generally optimistic about risk assets in the short term, particularly favoring emerging markets and Asia due to positive economic data [3] - China is a key market of interest, with upcoming political meetings expected to provide insights into future market directions [3]

Core Viewpoint - Nomura Securities analysts, led by Kyohei Morita, believe that Japan's economy is unlikely to fall into recession despite potential economic slowdowns caused by U.S. tariffs [1] Economic Outlook - Japan's economy is primarily driven by the service sector, which is expected to benefit from new stimulus measures through supplementary budgets [1] - Corporate investments in software and efforts to address labor shortages are anticipated to support Japan's economic growth [1] Risks and Challenges - The analysts caution that tariffs may exert "downward pressure" on Japan's economy from July to September [1] Monetary Policy - The Bank of Japan is expected to begin raising interest rates in January 2026, as indicated by the central bank's governor, Kazuo Ueda, who emphasized readiness to continue rate hikes if the underlying inflation rate approaches the 2% target [1]