Japan Market Daily

On May 31, 2026, while major financial markets were closed for Sunday, market participants focused on progress in the tentative U.S.-Iran ceasefire and its impact on energy. Following reports of a 60-day ceasefire extension and the gradual reopening of the Strait of Hormuz, benchmark Brent crude fell to the 92-dollar range and WTI crude moved to the 87-dollar level per barrel, easing inflation fears. In the FX market, safe-haven dollar demand receded, leaving the USD/JPY cross stable in the early 159 range. Meanwhile, economic data released by China's National Bureau of Statistics showed that the official manufacturing purchasing managers' index (PMI) for May fell by 0.9 points from the previous month to 49.5, slipping below the 50-point threshold for the first time in three months. Consequently, while relief over easing Middle East tensions spread, slowing momentum in the world's second-largest economy emerged as a fresh concern.

On May 30, 2026, while major financial markets were closed for Saturday, global sentiment remained supported by the previous day's gains on Wall Street, where the S&P 500 and Nasdaq extended their record runs, driven by a 33 percent surge in Dell Technologies on robust AI demand. In the FX market, safe-haven dollar buying receded following reports that the U.S. and Iran reached a tentative agreement on a 60-day ceasefire extension, keeping the USD/JPY cross in the early 159 range. Energy markets also eased, with WTI crude declining to the 87-dollar level and Brent crude falling to around 92 dollars per barrel. However, the heads of the IMF, World Bank, and other international institutions issued a joint statement warning that global economic risks will heighten if shipments through the Strait of Hormuz fail to normalize ahead of the summer peak demand. Domestically, companies are adapting to supply vulnerabilities; for instance, Calbee launched eco-friendly, monochrome-packaged potato chips to conserve petroleum-based ink materials.

On May 29, 2026, the Nikkei 225 rallied sharply to snap a three-day losing streak, surging 1,636.38 yen to close at a fresh historic high of 66,329.50 yen. Following the gains on Wall Street from the previous session, broad-based buying flooded the Tokyo market, particularly targeting technology and electronic component shares. Investor sentiment was significantly boosted by media reports indicating that negotiations between the United States and Iran toward ending their conflict were making tangible progress, which greatly alleviated lingering geopolitical anxieties. During intraday trading, the benchmark index extended its gains by over 1,700 yen, briefly breaching the 66,400 threshold. The broader TOPIX also recorded a substantial gain, rising 55.16 points to end at 3,957.17, underscoring the broad market strength.

On May 28, 2026, the Nikkei 225 snapped its upward momentum, closing down 306 yen at 64,693 yen. Although the Dow Jones reached a fresh record high on Wall Street the previous day on the back of falling energy costs, the Tokyo market faced profit-taking driven by short-term overheating concerns and a slowdown in AI and semiconductor shares. In the FX market, the USD/JPY pair edged higher ahead of key U.S. economic data, trading in the mid-159 range. In commodity markets, WTI crude oil futures briefly sank to the 87-dollar level per barrel, hitting a one-month low, after Iran disclosed partial details regarding a draft memorandum with the U.S. aimed at normalizing maritime traffic in the Strait of Hormuz. Meanwhile, in Brussels, the European Policy Centre announced its upcoming Economic Security Forum to address heightening supply chain and cost-of-living pressures stemming from the geopolitical conflict.

On May 27, 2026, the Nikkei 225 ticked up slightly to close at 64,999.41 yen, up 3.32 yen, refreshing its historic high for another session. Buoyed by gains in U.S. tech stocks, the benchmark index initially surged in early trading, breaking above the 66,000 threshold for the first time intraday before profit-taking erased most of the gains. In the FX market, the USD/JPY pair hovered near the 159 level, maintaining a weak-yen tone. Domestically, Keidanren released its first tally for spring wage negotiations among major firms, revealing an average wage hike of 5.46 percent, marking the third consecutive year above 5 percent. Geopolitically, supply chain anxieties persisted as the South Korean government indicated that a cargo vessel attack near the Strait of Hormuz likely involved an Iranian-made missile.

On May 26, 2026, the Nikkei 225 snapped its three-day winning streak, closing down 162.10 yen at 64,996.09 yen. With Wall Street closed the previous day for the Memorial Day holiday, the Tokyo market lacked clear direction, prompting investors to lock in gains after a massive surge of over 5,000 yen during the prior three sessions. The benchmark index tumbled by over 500 yen early in the morning before bargain hunting in lagging sectors like construction and real estate provided downside support. The broader TOPIX also ticked down by 4.11 points to end at 3,938.46. Market participants adopted a cautious stance as stalled progress in the final stages of the U.S.-Iran negotiations checked the recent decline in crude oil prices and bond yields, keeping the global focus on geopolitical developments and inflation trends.

On May 25, 2026, the Nikkei 225 extended its rally for a third consecutive session, surging 1,819.12 yen to close at a fresh historic high of 65,158.19 yen, breaching the 65,000 threshold for the first time. Market sentiment was heavily boosted by growing optimism over an imminent U.S.-Iran ceasefire agreement, which caused benchmark crude oil futures to plummet into the 90-dollar range per barrel, easing global inflationary and interest rate anxieties. Additionally, solid corporate earnings supported by strong AI demand—confirmed as major companies in Japan and the U.S. wrapped up their fiscal announcements—fueled the broad-based market advance. In other markets, the USD/JPY cross hovered just below the 159 level, domestic long-term interest rates paused their upward trend, and the broader TOPIX also refreshed its record high for the first time in nearly two and a half months.

On May 24, 2026, while major financial markets were closed for Sunday, international focus remained locked on U.S.-Iran negotiations and global resource security. According to reports from the Financial Times and other sources, progress has been made on a draft memorandum involving a 60-day ceasefire extension and the gradual reopening of the Strait of Hormuz. However, unresolved Iranian demands regarding compensation and sanction relief leave a risk of re-escalation, even as Brent crude eased to around 104 dollars per barrel. Meanwhile, following the conclusion of the APEC Ministers Responsible for Trade Meeting in Suzhou, China, Japan's Economy Minister Akazawa engaged in bilateral discussions with economic representatives to reinforce supply chain resilience against persistent global inflation and material shortages driven by the Middle East crisis.

On May 23, 2026, while major cash markets were closed for Saturday, the Nikkei 225 futures for June delivery jumped 280 yen from the previous day's close to reach 63,620 yen on the Osaka Exchange. In Suzhou, China, the APEC Ministers Responsible for Trade Meeting concluded, where Japan's Economy Minister Akazawa emphasized the early stabilization of the Strait of Hormuz and highlighted the "POWERR Asia" initiative, which pledges 10 billion dollars in fiscal cooperation to boost regional energy and resource resilience. Meanwhile, prolonged Middle East risks continue to stress corporate operations globally, as seen in rising container freight rates from major hubs like Busan, tightening raw material inventories, and downstream cost pressures caused by global maritime logistics disruptions.

On May 22, 2026, the Nikkei 225 surged for a second straight session, closing up 1,654 yen at 63,339 yen to marginally refresh its all-time high. Broad-based buying was triggered by growing optimism over progress in U.S.-Iran ceasefire negotiations, which led to lower crude oil prices and eased global inflationary concerns. Following Wall Street's performance where the Dow Jones reached a fresh record high for the first time in nearly three months, the Tokyo market saw a strong rally led by AI and semiconductor-related shares, such as SoftBank Group. In the FX market, the USD/JPY cross temporarily touched the 159 range, but upside momentum slowed around 159 yen following coordinated currency warnings from U.S. and Japanese finance officials and reports that the U.S. called off strikes against Iran.

On May 21, 2026, the Nikkei 225 rebounded sharply for the first time in six days, closing up 1,879 yen at 61,684 yen to reclaim the 60,000 threshold. Market sentiment turned risk-on after U.S. President Trump indicated that talks with Iran were in their final stages, causing Brent crude to plunge over 5% to around 105 dollars per barrel. This drop alleviated severe inflation concerns and halted the rise in global sovereign bond yields, sparking widespread short-covering. Stocks were further boosted by a broad rally in chip shares following NVIDIA's strong earnings and a surge in SoftBank Group on OpenAI listing reports. In the FX market, the dollar slightly depreciated against major peers, though the USD/JPY cross touched the 159 range. However, during U.S. trading hours, oil prices bounced back up following comments from Iran's Supreme Leader, highlighting persistent geopolitical volatility.

On May 20, 2026, the Nikkei 225 fell for a fifth consecutive session, closing down 746 yen at 59,804 yen and dropping below the 60,000 threshold for the first time in nearly three weeks. The index tumbled by over 1200 yen early in the session, driven by rising global bond yields and Wall Street's tech sell-off, alongside pre-earnings position squaring ahead of NVIDIA's financial results. In currency and commodity markets, the U.S. dollar remained firm, and crude oil prices held near recent highs; although U.S. President Trump postponed planned military action against Iran, lingering anxieties over the Strait of Hormuz negotiations persisted. Additionally, the UN downgraded its 2026 global economic growth forecast to 2.5 percent, and news of an impending 18-day strike by Samsung Electronics workers raised concerns over potential global supply chain disruptions.

On May 19, 2026, the Nikkei 225 fell for a fourth consecutive session, closing at 60,550 yen, down 265 yen. The index initially surged over 600 yen in the morning, cheered by a stronger-than-expected preliminary Q1 real GDP growth of 0.5% quarter-on-quarter and gains on Wall Street. However, it reversed course due to declining U.S. chip stocks, rising long-term interest rates in both nations, and profit-taking. In the FX market, the dollar strengthened on elevated U.S. 10-year Treasury yields, pushing the yen into the upper 158 range and briefly touching 159, keeping markets alert for government intervention. In energy, crude oil futures remained high in the 108-dollar range per barrel; although reports indicated U.S. President Trump postponed a planned strike on Iran, unresolved negotiations fueled persistent concerns over global inflationary pressures.

On May 18, 2026, global markets faced renewed inflation concerns as stalled U.S.-Iran negotiations and the prolonged blockade of the Strait of Hormuz pushed crude oil prices higher. Reflecting expectations of a prolonged hawkish policy path, sovereign bond yields rose sharply on both sides of the Atlantic. Following the previous weekend's sell-off in U.S. equities, the Tokyo market opened lower, with the Nikkei 225 extending its decline for a third consecutive session to close at 60,815 yen, down 593 yen. Rising domestic long-term interest rates heavily weighed on sentiment, causing the index to plunge by over 1000 yen at one point. In response to global resource volatility, Japan's Economy Minister Akazawa met with Brazil's Foreign Minister to strengthen bilateral economic ties and secure stable energy supplies, highlighting continued international efforts to reinforce resource security.

On May 17, 2026, while major financial markets were closed for Sunday, the global economic outlook was significantly boosted by official announcements following the U.S.-China summit. China's Ministry of Commerce announced that Beijing and Washington reached a principled agreement to mutually cut tariffs on an equivalent scale for specific products, including agricultural goods and aircraft components. The deal is expected to facilitate aircraft purchases, guarantee engine part supplies, and resolve non-tariff barriers, alleviating fears of severe trade friction. However, the economic fallout from the prolonged blockade of the Strait of Hormuz persists. Persistent concerns over high energy costs, logistical disruptions, a slowdown in the Eurozone, reaccelerating inflation in the U.S., and rising bond yields in Japan continue to weigh on investor sentiment.

On May 16, 2026, while major markets were closed for the weekend, signs of a sharp economic slowdown in the Eurozone emerged due to the ongoing Middle East crisis. Qatar National Bank (QNB) reported that the Eurozone Composite PMI plunged to 48.6 points, driven by surging energy costs and shipping disruptions that severely impacted the vital services sector, dragging business confidence to its lowest level since late 2022. Germany's Federal Ministry for Economic Affairs also announced that while Q1 real GDP grew slightly stronger than expected at 0.3 percent quarter-on-quarter, indicators point to a clear economic dampening in Q2 amid persistent supply chain bottlenecks. In Russia, despite President Putin's positive remarks on domestic figures, an ISW analysis revealed that the war economy is sliding into stagflation, with the federal budget deficit surging to 78.4 billion dollars in the first four months—exceeding the annual planned level by over 150 percent. Meanwhile, commodity markets saw a sharp drop as global spot silver prices plummeted by over 8 percent at the close of Friday's trade.

On May 15, 2026, the Nikkei 225 plummeted by 1,244 yen to close at 61,409 yen, marking a sharp two-day decline. Although the index initially surged over 500 yen to hit a fresh intraday record high—following a historic milestone on Wall Street where the Dow Jones reached the 50,000 mark for the first time—heavy profit-taking quickly emerged. Selling intensified among high-flying AI and semiconductor stocks like Kioxia and Advantest due to overbought concerns. Additionally, Japan's long-term interest rates hit a 29-year high, fueling worries over high tech valuations and potential rate hikes by the BOJ. Geopolitically, U.S. President Trump concluded his summit with Chinese President Xi Jinping in Beijing, emphasizing a mutual commitment to reopening the Strait of Hormuz before departing, though uncertainty regarding energy prices persists.

On May 14, 2026, the Nikkei 225 fell for the first time in three days, closing at 62,654 yen, down 618 yen. Although the index hit a fresh intraday record high in the morning session following a rally in U.S. tech stocks, profit-taking dominated the afternoon due to concerns over overbought levels. In the FX market, the dollar remained strong near the 158 yen level following a higher-than-expected U.S. Producer Price Index (PPI). In the energy sector, crude oil futures briefly dipped below 100 dollars per barrel after reports that Iran allowed some commercial vessels to pass through the Strait of Hormuz. Meanwhile, Asian markets remained cautious ahead of the summit between President Trump and President Xi in China, as investors balanced hopes for eased semiconductor restrictions against persistent tensions over Taiwan.

On May 13, 2026, the global economy faced renewed inflation concerns as the U.S. April CPI rose 3.8% year-on-year, exceeding market expectations. This pushed U.S. Treasury yields higher and drove the yen down to the 159 range against the dollar. In the Middle East, the prolonged blockade of the Strait of Hormuz increasingly impacted manufacturers, with Isuzu Motors reporting an 11% drop in operating profit due to logistics disruptions. Meanwhile, the U.S., Japan, and the Philippines convened the Luzon Economic Corridor Steering Committee to strengthen global supply chains and energy security through trilateral cooperation.

On May 12, 2026, the Nikkei 225 continued its decline, closing at 61,967 yen, down 450 yen. High crude oil prices driven by Middle East tensions fueled concerns over rising costs, leading to selling pressure on export-oriented stocks. In the FX market, the yen weakened to the 158 range against the dollar, heightening speculation of government intervention. China's April economic data revealed persistent sluggishness in real estate investment, though high-tech manufacturing remained resilient. In the U.S., the 10-year Treasury yield rose near 4.5 percent as expectations for prolonged Fed tightening to curb inflation weighed on market sentiment.

On May 11, 2026, the Nikkei 225 briefly hit a fresh intraday record high, surging over 600 yen to surpass 63,091, before retreating to close down 295 yen at 62,417 due to profit-taking and rising oil futures fueled by uncertainty in Iran. While the S&P 500 reached a record high in the U.S. on strong labor data and tech gains from companies like Intel, geopolitical risks persisted after President Trump rejected Iran's latest response. In response, Japan's State Minister of Economy Yamada visited the Middle East to secure stable oil supplies and propose the "POWERR Asia" initiative to bolster regional energy resilience. Meanwhile, Chinese markets saw a surge in the semiconductor materials sector, with electronic gas suppliers hitting daily limits as AI demand and global supply constraints intensified, highlighting a robust focus on high-tech self-reliance amidst broader geopolitical volatility.

On May 10, 2026, while major markets were closed for Sunday, significant movements in hard asset markets were driven by U.S. labor data and Middle East volatility. Global gold prices finished the week above 4,700 dollars per ounce, supported by resilient U.S. non-farm payroll growth of 115,000 despite weakening consumer sentiment and persistent inflation expectations. Geopolitically, tensions between the U.S. and Iran surged following reports of U.S. strikes on military targets near the Strait of Hormuz, casting doubt on a viable ceasefire. With shipping restricted or effectively blocked, Japan is prioritizing energy security through national reserve releases and diversifying crude oil sources from Australia and the U.S. In the financial sector, the U.S. dollar remained weak, while the 10-year Treasury yield hovered around 4.4 percent.

On May 9, 2026, while major markets were closed for the weekend, China reported a higher-than-expected 14.1 percent jump in April exports, underscoring global economic resilience just days before a high-stakes summit between President Trump and President Xi in Beijing. In the Middle East, ongoing uncertainty regarding ceasefire talks between the U.S. and Iran, coupled with reports of sporadic clashes near the Strait of Hormuz, maintained a risk-averse sentiment following the previous day's retreat of U.S. stocks from record highs. In Japan, Toyota Motor became the first Japanese company to surpass 50 trillion yen in annual revenue for the fiscal year ending March 2026; however, it forecasted a third consecutive year of profit decline due to U.S. tariffs and rising logistics costs from Middle East tensions. Additionally, the 2026 Global Progress Action Summit commenced in Canada, where world leaders and officials are discussing economic growth through international cooperation and modern governance.

On May 8, 2026, the Nikkei 225 fell for the first time in three sessions, closing at 62,713 yen, down 120 yen from the previous day. Profit-taking emerged following the previous day's record-breaking surge and a decline in U.S. tech stocks. Investor sentiment was dampened as hopes for an early ceasefire in the Middle East receded after Iran expressed a negative view on U.S. proposals and sporadic clashes were reported near the Strait of Hormuz. While IHI shares soared on strong earnings, SoftBank Group weighed on the index. Meanwhile, Sony Group projected a record net profit for the fiscal year ending March 2027, driven by its robust gaming and entertainment divisions. In the foreign exchange market, the yen traded in the upper 156 range against the dollar, with persistent energy price volatility remaining a primary concern for the global economy.

On May 7, 2026, the Nikkei 225 surged by 3,320 yen to close at a record high of 62,833 yen, driven by easing geopolitical tensions and a rally in U.S. markets. Reports of an impending ceasefire between the U.S. and Iran triggered a sharp decline in crude oil prices, alleviating fears of cost-push inflation and fueling a "risk-on" sentiment. Buying was particularly heavy in AI and semiconductor stocks, with Kioxia Holdings hitting a post-listing high. In the FX market, the yen strengthened significantly, briefly touching the 155 range against the dollar amid speculation of government intervention. Meanwhile, BOJ minutes from the March meeting revealed that members highlighted upside inflation risks and discussed the necessity of timely rate hikes. Despite the market rally, the IMF warned of a potential downward revision to global growth due to ongoing supply chain fragilities, keeping resource security at the forefront of policy agendas.

On May 6, 2026, the global economy experienced a shift from tension to cautious optimism following major geopolitical developments. Crude oil prices dropped sharply after President Trump announced that talks with Iran were "very productive" and that a deal was highly likely. Consequently, the U.S. suspended its "Project Freedom" maritime escort operations. In Japan, Economy Minister Akazawa visited the UAE and Saudi Arabia to secure alternative oil supply routes and expand joint petroleum reserves, continuing efforts to bolster resource security. Meanwhile, in China, the yield on the Yu’e Bao money market fund hit a historic low of 0.949 percent, reflecting the challenges of a prolonged low-interest-rate environment. As Japan’s Golden Week concluded, market sentiment trended toward "risk-on" in anticipation of the resumption of trading, supported by easing geopolitical risks and strong earnings expectations in the semiconductor sector.

On May 5, 2026, the global economy was dominated by escalating military clashes in the Strait of Hormuz and subsequent market volatility. Following reports that the U.S. Central Command engaged and sank Iranian vessels to initiate an operation to reopen the strait, the Dow Jones Industrial Average plunged by 557 dollars. Crude oil prices surged over 6 percent, reigniting global anxieties regarding energy supply chains. In currency markets, the yen spiked to the 155 range against the dollar, driven by safe-haven buying and caution over potential interventions by Japanese authorities. In the corporate sector, while GlobalFoundries reported Q1 earnings that exceeded market expectations, supporting some AI-related stocks, overall investor sentiment remained dampened by geopolitical risks. Additionally, Japan and Australia issued a joint declaration to secure critical minerals, highlighting an urgent global shift toward strengthening resource security.

On May 4, 2026, the global economy centered on resource security and a downward revision of growth forecasts. In Canberra, Japanese Prime Minister Sanae Takaichi and Australian Prime Minister Anthony Albanese agreed to elevate their relationship to a "quasi-alliance," focusing on economic security through resilient supply chains for critical minerals and energy. Meanwhile, IMF Managing Director Kristalina Georgieva formally abandoned the previous baseline forecast, declaring that the global economy has entered an "adverse scenario" with growth slowing to 2.5 percent and inflation rising to 5.4 percent. In response to the Strait of Hormuz blockade, U.S. President Trump announced the commencement of "Project Freedom" to escort commercial vessels through the passage. These developments highlight how persistent energy supply constraints are intensifying global cost-push inflationary pressures.

On May 3, 2026, while major financial markets were closed for Sunday, significant economic measures addressed escalating Middle East tensions. Following the effective blockade of the Strait of Hormuz, the Japanese government commenced its second emergency oil release from the Shibushi National Petroleum Reserve Base to secure energy supplies. This follows a volatile week where the Nikkei 225 hit a historic 60,000 mark while the yen plummeted to the 160 range against the dollar, triggering record-scale currency interventions. Globally, the economy is caught between the "super cycle" of AI-driven semiconductor demand and the shadow of persistent inflation fueled by high energy costs. Organizations like the IMF warn that if supply chain disruptions persist, global growth for 2026 may be limited to 3.1 percent, prompting nations to accelerate their resource security strategies.

On May 2, 2026, while major financial markets were closed for the weekend, the global economic outlook was clouded by surging crude oil prices due to escalating Middle East tensions. Following Iran's warning of a total blockade of the Strait of Hormuz, WTI crude futures surpassed 115 dollars per barrel, intensifying fears of severe impacts on manufacturing and logistics. In the U.S., while the latest employment data showed resilience, signs of re-accelerating inflation revived expectations for further Fed rate hikes, pushing long-term yields higher. In Japan, the dual pressure of a weak yen and high resource costs has prompted major utility companies to consider further electricity price hikes, placing a heavy burden on households. Meanwhile, China introduced new measures to expand the use of the yuan in trade settlements with Belt and Road partners, signaling a clear move toward de-dollarization and reflecting an accelerating fragmentation of global economic blocs amid heightened geopolitical risks.

On May 1, 2026, the global economy faced renewed inflationary pressures and energy supply anxieties as Middle East conflicts persisted. While U.S. Q1 GDP grew by 2.0 percent, rising fuel prices driven by the conflict in Iran began to dampen consumer sentiment. In Japan, Prime Minister Takaichi’s proactive fiscal policy faces scrutiny as a weak yen and rising interest rates heighten stagflation fears, with import price shocks challenging corporate strategies. Significant shifts in resource geopolitics occurred as the UAE officially withdrew from OPEC+, and China implemented zero-tariff measures for 53 African nations starting today. Meanwhile, Taiwan reported its fastest quarterly growth in 39 years, a staggering 13.7 percent, fueled by an insatiable global demand for AI-related hardware, positioning the tech sector as a primary engine of growth amidst broader economic instability.