Japan Market Daily | Kabutaro & Friends

On July 31, 2026, Tokyo's Nikkei 225 extended its rally, closing up 2,494.59 points (+4.03%) at 64,362.02, while the TOPIX rose 50.80 points (+1.29%) to 4,003.30. AI and semiconductor stocks were reassessed positively in the US market the previous day, triggered by Microsoft's earnings, and buying in Tokyo concentrated on chip-related shares including Kioxia Holdings, whose April-June net profit surged 31-fold year-on-year but still missed market expectations. However, advancers on the Prime Market numbered only 612 against 922 decliners, showing the gains were concentrated in a narrow group of stocks. The Bank of Japan held its policy rate steady at 1.00% following its policy meeting and raised its FY2026 growth outlook in its Outlook Report. Currency markets saw extreme volatility: USD/JPY plunged as low as 157.94 in New York trading on the 30th, with suspected yen-buying, dollar-selling intervention by the government and Bank of Japan. In New York trading on the 31st, it rose back to 160.53 before falling to close around 158.17. The US June PCE deflator came in at +3.7% year-on-year.