Japan Market Daily

On April 30, 2026, the Nikkei 225 fell by 321 yen to close at 59,596 as geopolitical risks resurfaced following President Trump's rejection of Iran's ceasefire proposal and his remarks on maintaining the blockade of the Strait of Hormuz. In the bond market, Japan’s 10-year government bond yield reached a 27-year high of 2.515 percent amid fears of re-accelerating inflation. The yen remained under pressure, hovering near the 160 range against the dollar. Meanwhile, China's official manufacturing PMI for April came in at 50.3, staying in expansion territory for the second consecutive month. However, global markets ended the month on a cautious note as surging crude oil prices, with WTI hitting 108 dollars, intensified concerns over supply-side inflation and potential interest rate hikes in the U.S. and Europe.

On April 29, 2026, Japanese markets were closed for the Showa Day holiday, but global markets remained tense ahead of the FOMC policy decision. Geopolitical risks lingered as the U.S. weighed reinstating certain sanctions on Iran despite the continued conditional opening of the Strait of Hormuz, keeping crude oil prices elevated near 105 dollars per barrel. In the real economy, the impact of high energy and material costs became more evident, with major food producers and utility companies announcing price hikes for the coming months. In currency markets, the dollar stayed strong against the yen in the 159 range due to expectations of prolonged high U.S. interest rates. Meanwhile, Chinese markets saw modest gains, led by energy stocks following robust Q1 earnings from state-owned enterprises, despite the broader global uncertainty.

On April 28, 2026, the Nikkei 225 fell for the first time in three days, closing down 619 yen at 59,917 and dipping below the psychological 60,000 threshold. The decline was triggered by overnight losses in U.S. tech stocks and disappointing earnings from domestic semiconductor leaders. The Bank of Japan decided to maintain its policy rate at 0.75 percent, but Governor Ueda struck a hawkish tone by stating the bank would act appropriately to avoid falling behind the curve on inflation. This prompted the yen to briefly strengthen to the 158 range against the dollar, pressuring stocks. In China, a Politburo meeting emphasized stabilizing the property market and urban renewal. Meanwhile, China reported a 15.5 percent year-on-year increase in industrial profits for the first quarter, signaling a steady recovery despite global geopolitical uncertainties.

On April 27, 2026, the Nikkei 225 surged to close at 60,537 yen, up 821 yen from the previous Friday, marking its first-ever finish above the 60,000 threshold. The rally was fueled by reports that Iran proposed a new ceasefire deal to the U.S. via Pakistan, raising hopes for the reopening of the Strait of Hormuz and a de-escalation of Middle East tensions. This geopolitical optimism triggered a risk-on sentiment, driving heavy buying in semiconductor and "Physical AI" stocks like Fanuc following its strong earnings report. In currency markets, the yen hovered in the low 159 range against the dollar; while intervention fears limited further depreciation, expectations of prolonged high U.S. interest rates provided support for the dollar. Anticipation that the Bank of Japan would maintain its current monetary policy at its upcoming meeting also underpinned market strength.

On April 25, 2026, while major financial markets were closed for the weekend, Nikkei 225 futures climbed to the 59,900 range, bringing the historic 60,000 mark within reach for the upcoming week. This upward trend is supported by typical new-fiscal-year capital inflows and strong technical momentum. In the real economy, while robust wage hikes from spring negotiations are beginning to support consumer spending, households remain cautious due to high food and energy costs. Japan's March CPI rose 1.8 percent, staying below 2 percent for the second month thanks to government subsidies, but fears of re-accelerating inflation after these measures end persist. Global growth faces multiple downside risks, including potential supply chain disruptions in the Strait of Hormuz due to Middle East tensions, rising oil prices, and strained Japan-China relations impacting tourism and rare earth supplies, keeping investors vigilant despite the stock market rally.

On April 24, 2026, the Nikkei 225 rebounded to close at 59,716 yen, up 575 yen from the previous day. Market sentiment turned positive following President Trump’s announcement of a three-week extension for ceasefire talks between Israel and Lebanon, easing geopolitical tensions. Strength in semiconductor and AI-related stocks, following gains in U.S. tech shares, led the rally. Meanwhile, the WHO released a report estimating potential global economic losses of up to 299 billion dollars due to Middle East instability, warning of increased poverty risks. In currency markets, the dollar remained strong, keeping the yen volatile in the 159 range. While South Korea reported a robust Q1 GDP growth of 1.7 percent driven by exports, the global economic outlook remains cautious due to persistent uncertainty in energy markets.

On April 23, 2026, the Nikkei 225 briefly surpassed the historic 60,000 mark for the first time during trading hours. Initial buying focused on semiconductor and AI-related stocks amid hopes for continued passage through the Strait of Hormuz. However, the index reversed its gains to close at 59,140 yen, down 445 yen, as investors locked in profits and reacted to reports of ship seizures by the Iranian Revolutionary Guard. In currency markets, the dollar strengthened to the upper 159 yen range due to safe-haven demand. In the real economy, rising costs of crude oil and raw materials remain significant downside risks for corporate earnings. Consequently, the Japanese government held an emergency task force meeting to ensure the stable supply of essential medical goods and materials affected by the Middle East tensions.

On April 22, 2026, the Nikkei 225 rose for a third consecutive session to close at 59,585 yen, up 236 yen and marking a new historic high. Market sentiment was supported by President Trump’s announcement of an indefinite ceasefire extension with Iran, which prompted buying in AI and semiconductor-related stocks. Japan's Ministry of Finance maintained its economic assessment for all 11 regions, describing the economy as recovering moderately while warning of supply chain risks in the Strait of Hormuz. In currency markets, the yen remained weak in the low 159 range against the dollar due to persistent interest rate differentials. Chinese markets also saw gains, with the Shanghai Composite Index rising for a third day as geopolitical anxieties eased across Asia.

On April 21, 2026, the Nikkei 225 rose for a second consecutive session to close at 59,349 yen, up 524 yen. Market sentiment was buoyed by expectations of renewed talks between the U.S. and Iran, briefly pushing the index above the 59,000 mark. While AI and semiconductor stocks led the gains, the broader TOPIX index declined as investors remained wary of President Trump's skeptical stance on extending the ceasefire and reports of the U.S. seizing an Iranian cargo ship. In its Financial System Report released the same day, the Bank of Japan warned of complex risks involving surging oil prices and rising interest rates. The yen showed slight strength due to intervention caution but remained volatile near 159 against the dollar, pressured by expectations that U.S. and European central banks will maintain high rates.

On April 20, 2026, the Nikkei 225 rebounded to close at 58,824.89 yen, up 348.99 yen from the previous Friday. The market opened higher following gains in U.S. equities and was further supported by the Iranian Foreign Minister's statement regarding a temporary reopening of the Strait of Hormuz during the ceasefire period. Although the index briefly reclaimed the 59,000 level, gains narrowed in the afternoon due to lingering doubts about actual maritime safety and profit-taking by institutional investors. In currency markets, the yen hovered in the low 159 range against the dollar as expectations for prolonged high interest rates in the U.S. and Europe remained intact. While the brief de-escalation favored risk-on sentiment, concerns over supply chain disruptions and energy price volatility persist, keeping the global economic outlook cautious.

On April 19, 2026, while financial markets remained closed for the weekend, renewed concerns over the Strait of Hormuz cast a shadow over the upcoming trading week. Although Nikkei 225 futures briefly touched the 60,000 mark last week, the threat of a blockade and soaring transit fees by Iran have heightened risks of another surge in crude oil prices. Following the G20 meeting in Washington, BOJ Governor Ueda reaffirmed his stance on maintaining accommodative conditions while closely monitoring the impact of inflation. In the real economy, Japanese consumer confidence is weakening, with Golden Week holiday budgets decreasing for the first time in two years due to rising living costs. Meanwhile, China is accelerating its economic security measures by strengthening Free Trade Zones to build a more resilient domestic economy amidst escalating global geopolitical risks.

On April 18, 2026, the global economy was characterized by persistent geopolitical uncertainty and efforts to curb surging oil prices. The U.S. Treasury announced a temporary easing of sanctions to allow purchases of Russian crude oil in an attempt to stabilize global energy markets. However, conflicting statements from Iranian officials regarding the reopening of the Strait of Hormuz left supply route normalization in doubt. Gold prices surged toward 4,900 dollars per ounce as investors sought safe-haven assets. In Japan, the dual pressure of a weak yen and high energy costs led Shin-Etsu Chemical to announce a price hike of over 10 percent for all silicone products, reflecting a broader trend of cost-push inflation. Rising living costs are also dampening domestic demand, with consumer surveys showing the first decline in Golden Week holiday budgets in two years.

On April 17, 2026, the Nikkei 225 fell for the first time in four sessions, closing at 58,475 yen, down 1,042 yen from the previous day. Profit-taking dominated as investors locked in gains following the previous day's historic high, while concerns over stalled ceasefire talks between the U.S. and Iran weighed on sentiment. In currency markets, the yen hovered near the high 159 range against the dollar, fueling fears of import-driven inflation. BOJ Governor Ueda noted at the G20 meeting that the impact of Middle East tensions is "extremely difficult" to navigate, posing both downside risks to growth and upside risks to prices. Although the fourth tally of spring wage negotiations showed a high average increase of 5.08 percent, markets have shifted to a cautious stance, closely monitoring geopolitical developments and their broader economic fallout.

On April 16, 2026, the Nikkei 225 surged for a third consecutive session to close at 59,518 yen, up 1,384 yen from the previous day and reaching a new historic high. Market sentiment shifted toward risk-on as news of an extended ceasefire between the U.S. and Iran eased geopolitical concerns, coupled with strong gains in semiconductor stocks following Wall Street's tech rally. Meanwhile, at the G7 Finance Ministers and Central Bank Governors meeting in Washington, leaders emphasized the need for stability in the Middle East. Japan's Finance Minister Katayama met with the U.S. Treasury Secretary to reaffirm close cooperation on currency volatility. Despite persistent concerns over high energy costs impacting supply chains, investors welcomed the signs of easing tensions.

On April 15, 2026, the Nikkei 225 rose for a second session to close at 58,134 yen, reclaiming the 58,000 level for the first time in six weeks. Market sentiment was lifted by gains in U.S. equities and hopes for a de-escalation of Middle East tensions following President Trump's remarks on potential talks with Iran. Conversely, the IMF lowered its 2026 global growth forecast to 3.1 percent, warning of a potential recession due to prolonged conflict. Supply chain disruptions at the Strait of Hormuz and surging crude oil prices remain significant risks to global stability. In currency markets, the yen remained under pressure as high interest rate expectations in the U.S. and Europe persisted, fueling concerns over cost-push inflation in Japan.

On April 14, 2026, the Tokyo stock market staged a powerful rebound, reversing the previous day's sharp losses. The Nikkei 225 surged by 1,374 yen to close at 57,877, driven by hopes of de-escalating tensions after President Trump mentioned a potential resumption of talks with Iran. Optimism in the tech sector, fueled by gains in U.S. markets, led to a significant rally in semiconductor-related stocks.However, the real economy continues to face challenges. Japan's Minister of Economy, Trade and Industry noted that while overall oil supplies are sufficient, supply chain bottlenecks are causing shortages in products like paint thinners. On the same day, the IMF warned that the Middle East conflict is dampening global growth prospects, potentially leading to a downward revision of annual forecasts. While markets welcomed the brief respite in geopolitical tension, concerns persist regarding energy price volatility and sluggish domestic demand.

On April 13, 2026, the Tokyo stock market fell sharply due to escalating tensions in the Middle East. The Nikkei 225 closed 421 yen lower at 56,502 after ceasefire talks between the U.S. and Iran failed. Concerns over energy security intensified following President Trump's remarks on a potential blockade of the Strait of Hormuz, driving crude oil prices higher.In the bond market, Japan's 10-year government bond yield reached a 27-year high of 2.49% amid inflation fears. The yen weakened to the 159 range against the dollar, further pressuring domestic prices. The impact on the real economy is becoming evident, with some manufacturers suspending orders due to supply chain disruptions. Global leaders are expected to discuss the economic fallout of rising oil prices at the upcoming G20 meeting.

The deterioration of the Middle East situation continues, pushing up energy prices and increasing geopolitical risks. Asia’s growth rate is expected to slow to 5.1% in both 2026 and 2027, with high energy costs raising production costs and inflation. While global trade continues to expand in early 2026, inflationary pressures and rising trade costs are expected to slow growth. In the United States, growth is slowing but remains positive, with sticky inflation prompting continued caution in monetary policy. Overall, high energy prices, inflation, and geopolitical risks are increasing uncertainty in the global economy.

Rising tensions in the Middle East have pushed up energy prices, strengthening global inflationary pressures once again. In China, the PPI has turned positive for the first time in 41 months, signaling early signs of exiting deflation, although domestic demand remains weak. In Japan, the fiscal 2026 budget has reached a record scale, and corporate bankruptcies have risen to a 12‑year high due to higher prices and labor costs. Overall, geopolitical risks and rising costs are increasing uncertainty in the global economy.