Japan Market Daily | Kabutaro & Friends

On August 20, 2026, Tokyo's Nikkei 225 rebounded for the first time in three sessions, closing up 890.37 points (+1.36%) at 66,216.79, with gains reaching nearly 1,000 points at one stage. The TOPIX also rose 47.42 points to 4,059.73. In the US on the 19th, the Treasury announced it would at least double the size of each liquidity-support buyback operation for long-dated Treasuries, sending long-term yields lower and lifting all three major indexes. Tokyo followed suit, with bargain-hunting buybacks dominating after the Nikkei had fallen nearly 3,900 points over the previous two sessions, and buying spread broadly across the market. A sharp rally in South Korea's KOSPI provided further support. The minutes of the July FOMC meeting showed many participants judged that additional rate hikes would likely be necessary if inflation failed to decline, but rate-hike expectations receded given the recent softening in inflation data. USD/JPY fell to 158.05 in overseas trading before edging higher in the low-to-mid 158 range in Tokyo. Japan's July trade balance showed a deficit of 634.5 billion yen.