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How does the market respond to textual novelty: Joint analysis of similarity and sentiment on Japanese corporate disclosures

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  • Nakatsuka, Hiromasa
  • Suimon, Yoshiyuki

Abstract

Market reactions to corporate disclosures have been widely studied, yet not all statements within them are equally informative. We investigate the role of informational novelty within disclosures and its impact on the market, focusing on Japanese financial results briefings. We measure sentence-level sentiment and novelty using a semantic approach. Our results show that sentiment in novel (low-similarity) statements has stronger explanatory power for post-event stock returns than sentiment in sticky (high-similarity) statements. A framework that jointly analyzes similarity and sentiment highlights informative differences within disclosures often overlooked by document-level approaches, offering a broadly applicable basis for financial text analysis.

Suggested Citation

  • Nakatsuka, Hiromasa & Suimon, Yoshiyuki, 2026. "How does the market respond to textual novelty: Joint analysis of similarity and sentiment on Japanese corporate disclosures," Economics Letters, Elsevier, vol. 265(C).
    • Handle: RePEc:eee:ecolet:v:265:y:2026:i:c:s0165176526001965
    DOI: 10.1016/j.econlet.2026.113002
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