Japan Market Daily

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.

On July 30, 2026, Tokyo's Nikkei 225 rebounded for the first time in three sessions, closing up 433.24 points (+0.71%) at 61,867.43. Buying was led by AI and semiconductor stocks following Advantest's strong earnings released after the previous day's close, briefly pushing the index up more than 1,490 points from the prior close, though the rally lost momentum as it advanced. The TOPIX, however, fell 21.53 points (-0.54%) to 3,952.50, with 983 issues declining, reflecting broader selling pressure. In New York on the 29th, the Dow fell 1,153.18 points, its largest drop this year, as hawkish interpretations of the FOMC's decision to hold rates steady combined with rising oil prices and inflation concerns. USD/JPY traded in a range of 163.21 to 163.80, standing at 163.70-163.80 at 5pm. Oil (WTI) trended higher on concerns over renewed US attacks on Iran, rising to the $84-85 per barrel range.

On July 29, 2026, Tokyo's Nikkei 225 fell for a second straight session, closing down 930.73 points (-1.49%) at 61,434.19. Bargain-hunting buying led the market higher at the open, rising as much as to 63,138.04, but a decline in the Nasdaq in the US overnight and an after-hours plunge in a major US chip equipment maker's shares weighed on sentiment. In the afternoon, a further drop in South Korea's KOSPI accelerated selling in AI and semiconductor stocks, sending the Nikkei down as far as 60,448.90 at one point. SK Hynix's April-June earnings, though showing higher sales and profit, missed market expectations, and its shares plunged in Seoul, adding to the pressure. Kioxia Holdings fell 13%. Meanwhile, value stocks such as Toyota Motor, which rose 7%, saw an accelerating shift of funds. The TOPIX rebounded. USD/JPY traded in the 163 range, with little clear direction as markets awaited the FOMC decision due later that evening Japan time. Oil (WTI) fell for a third straight session to $79.08.

On July 28, 2026, Tokyo's Nikkei 225 fell sharply, closing down 2,566.27 points (-3.95%) at 62,364.92. It fell more than 3,000 points intraday to a low of 61,923.60, marking the first time it dropped below 62,000 during trading hours in about two months, since late May. Semiconductor stocks had fallen in the US the previous day, with the Philadelphia Semiconductor Index (SOX) declining for a third straight session, and South Korea's KOSPI plunged more than 10% at one point during the day, further chilling investor sentiment and triggering risk-off selling concentrated in semiconductor-related shares in Tokyo. Kioxia Holdings hit its daily down-limit following reports of massive damages, marking its second consecutive day as the top decliner on the Prime Market. Retail-related stocks were bought, however, keeping decliners to about two-thirds of all issues. USD/JPY traded around 163.70, moving in a range of 163.67 to 163.83. Oil (WTI) recovered to the high-$81 range, while gold rose to $4,076 per ounce. The US Federal Reserve's FOMC meeting began today and runs for two days.

On July 27, 2026, Tokyo's Nikkei 225 rebounded, closing up 320.04 points from the previous session at 64,931.19, having risen as high as 65,220.69 during the day. Stocks were supported by reports that the US had halted its strikes on Iran since the 24th and that Iran had likewise stopped its retaliatory attacks, easing Middle East tensions. However, semiconductor-related stocks such as SoftBank Group and Advantest were among the largest negative contributors to the index, reflecting the more than 3% drop in the Philadelphia Semiconductor Index (SOX) in the US on Friday. USD/JPY traded at 163.53, down 0.33 yen from the previous session's close, as the unwinding of safe-haven dollar buying followed the US-Iran halt in attacks. Oil (WTI) briefly fell to the $83 range before settling around $84. Concerns over a wider conflict lingered, however, after reports that Yemen's Iran-aligned Houthi forces had attacked a Saudi Aramco facility. The US Federal Reserve's FOMC meeting is scheduled for the 28th-29th, and the Bank of Japan's policy meeting for the 30th-31st.

On July 24, 2026, Tokyo's Nikkei 225 fell for the day, closing down 1,811.45 points (-2.7%) at 64,611.15, with the TOPIX at 4,011.31. In the previous session on the 23rd, the Dow had fallen 506.93 points to 51,711.65 and the Nasdaq Composite dropped 553.20 points to 25,137.70, weighed down by renewed concerns over excessive AI investment following earnings from Alphabet and Tesla, rising oil prices after President Trump's warning of a large-scale attack on Iran, and growing expectations of a Fed rate hike this year on strong jobs data. This carried over into Tokyo trading, where selling spread across semiconductor and AI-related stocks such as Tokyo Electron and Ibiden, with Tokyo Electron alone dragging the index down by about 448 points. USD/JPY traded in the high-163 range, standing at 163.76-163.78 at 5pm, having briefly risen to 163.88 in New York trading. Finance Minister Katayama said the government would take resolute action if necessary.

On July 23, 2026, Tokyo's Nikkei 225 rebounded, closing up 307.00 points (+0.46%) at 66,422.60, while the TOPIX rose to 4,053.88. Although the Dow had edged lower in the previous session, AI and semiconductor stocks recovered on reassurance from Alphabet's (Google) plans to expand investment, and firmness in South Korean and US chip shares helped push the Nikkei up as much as 900 points after the open. With few fresh catalysts, however, the rally faded once short covering ran its course, and gains were pared back by the close. In New York on the 22nd, President Trump warned on social media that the US would strike Iranian power facilities if Iran attacked civilian vessels in the Strait of Hormuz, and Iran immediately vowed to retaliate against Gulf-state infrastructure, sending oil prices higher; rising long-term rates on inflation concerns also weighed on US stocks. USD/JPY traded near 163, moving in a range of 162.99 to 163.15 during the day. Oil (WTI) fell below $88 per barrel, while gold traded around $4,071 per ounce.

On July 22, 2026, Tokyo's Nikkei 225 edged down 116.59 points (-0.18%) to close at 66,115.60, while the TOPIX rose 18.18 points to 4,033.13. Early buying in AI and semiconductor stocks, following the previous day's gains in US chip shares and reports of a TSMC price increase, briefly pushed the index up more than 1,300 points to an intraday high of 67,592.20. However, caution ahead of major US tech earnings starting on the 23rd led to profit-taking in the afternoon, and the index fell to an intraday low of 65,955.60. USD/JPY traded in the low-163 range, standing at 163.01-163.03 at 5pm, up 0.42 yen from the previous day. Safe-haven dollar buying prevailed amid fears of escalating US-Iran military conflict, and the yen briefly touched 163.24 per dollar in New York trading on the 21st, its weakest level in about 39 years and 7 months since December 1986. Chief Cabinet Secretary Minoru Kihara said the government would respond appropriately, including through currency intervention, if necessary.

On July 21, 2026, Tokyo's Nikkei 225 rebounded sharply for the first time in three sessions, closing up 2,091.07 points (+3.26%) at 66,232.19. The TOPIX also rose 95.74 points to 4,014.95. Bargain-hunting buying led the market following the previous week's sharp decline on July 17, supported by a rise in the US Philadelphia Semiconductor Index (SOX) on the 20th and a more than 3% jump in South Korea's KOSPI on the 21st, with AI and semiconductor stocks leading gains. Kioxia Holdings, which had plunged the previous week, ranked among the top gainers on the Tokyo Stock Exchange Prime Market. USD/JPY traded around 162.50. Oil prices rose on Yemen's Houthi forces announcing a naval blockade against Saudi Arabia and escalating tensions with Iran, with WTI trading at $82-83 per barrel and Brent at $89-90. Gold prices traded in a range around $4,000 per ounce.

On July 17, 2026, Tokyo's Nikkei 225 fell sharply for a second straight session, closing down 2,694.42 points (-4.03%) at 64,141.12. It fell as much as 4,130 points intraday to around 62,704, marking the 5th-largest single-day point drop on record. The TOPIX also fell 109.58 points to 3,919.21. Following the previous day's US semiconductor selloff, heavy selling hit chip and AI-related stocks including Advantest, Tokyo Electron, Kioxia Holdings, and SoftBank Group. Position-adjustment selling was amplified by the upcoming three-day weekend and a South Korean market holiday, which reduced liquidity in a market closely correlated with Tokyo. Rising oil prices (WTI near $80) amid escalating attacks on Iran and higher US interest rates also weighed on investor sentiment. USD/JPY traded in a range of 162.11 to 162.47. Gold fell to $3,992.10, dropping below $4,000 for the first time in eight months.

On July 16, 2026, Tokyo's Nikkei 225 fell for the first time in three sessions, closing down 1,915.97 points (-2.79%) at 66,835.54. The TOPIX also fell 59.33 points to 4,028.79. Korean authorities raised margin requirements for leveraged semiconductor ETFs and suspended new single-stock leveraged ETF listings, triggering a selloff in US and Korean semiconductor stocks that spread to Tokyo's chip equipment and electronic component shares. USD/JPY traded in the low-162 range. In New York on the 16th, the Dow fell 105.67 points to 52,552.97 and the Nasdaq Composite dropped 387.28 points to 25,881.95, weighed down by escalating attacks on Iran and disappointing TSMC earnings that hit semiconductor stocks. Oil (WTI) closed at $78.95 and gold at $3,992.10.

On July 15, 2026, Tokyo's Nikkei 225 extended its gains, closing up 1,008.01 points (+1.49%) at 68,751.51. The rally was driven by AI and semiconductor stocks after the previous day's earnings from IBM and ASML lifted their US counterparts. The US June Consumer Price Index came in below forecasts, with headline inflation at +3.5% year-on-year and core inflation at +2.6%, confirming a slowdown. USD/JPY briefly fell to around 161.60 following the data but recovered to the low-162 range after Fed Chair Warsh's hawkish congressional testimony and rising oil prices. Oil (WTI) rose to $79.75 per barrel (+2.06%), while gold climbed to $4,060.80 per ounce (+1.38%).

On July 14, 2026, Tokyo's Nikkei 225 rebounded, closing up 500.77 points (+0.74%) at 67,743.50. Early in the session it fell nearly 1,000 points following the previous day's slump in South Korean stocks, but South Korean shares recovered in the afternoon, prompting buybacks. In currency markets, the dollar strengthened and the yen weakened amid renewed Middle East tensions, with USD/JPY trading around the mid-162 range. President Trump announced the reimposition of a blockade on Iranian ports and said the US would collect a 20% toll on cargo passing through the Strait of Hormuz. Oil prices (WTI) rose in response, trading in the $74-78 per barrel range. The US June Consumer Price Index (CPI) release and Fed Chair Warsh's congressional testimony are scheduled for later today.

On July 13, 2026, Tokyo's Nikkei 225 fell 1,315.00 points (-1.92%) to close at 67,242.73, while the TOPIX dropped 28.59 points to 4,007.49. The decline followed renewed Middle East tensions (President Trump's announcement of resuming a blockade of the Strait of Hormuz) and a sharp drop in South Korean stocks, which weighed on semiconductor shares. Mitsubishi UFJ Financial Group's market capitalization hit a record high on rising share price. The yen traded around 162 per dollar. In the US, the Dow fell 138.37 points to 52,498.64 and the Nasdaq dropped 408.43 points to 25,873.18. Oil prices (WTI) rose on supply concerns, while gold prices fell.

On July 10, 2026, the Nikkei 225 extended its gains to close up 251.82 yen at a fresh historic high of 73,331.16 yen, breaking records for the second consecutive day. Following overnight rallies driven by high-tech shares on Wall Street, buying dominated the Tokyo market from the opening bell, particularly centering on leading semiconductor stocks and electric appliances. The TOPIX also advanced by 23.23 points to a record high of 4,201.05. In the FX market, the USD/JPY cross briefly dropped to the lower 161 yen range after the overnight release of U.S. June CPI data, which grew slower than market forecasts and boosted rate-cut expectations. However, persistent demand for the greenback backed by widening yield differentials kept the pair hovering in the mid-161 yen range. On the macroeconomic front, Japan's corporate goods price index for June rose 3.2 percent year-on-year, indicating ongoing inflationary pressures.

On July 9, 2026, the Nikkei 225 rebounded sharply to close up 685.77 yen at a fresh historic high of 73,079.34 yen, finishing above the 73,000 mark for the first time. Following overnight rallies in U.S. tech shares, buying dominated the Tokyo market from the opening bell, particularly centering on leading semiconductor stocks and electric appliances. The TOPIX also advanced by 36.14 points to a record high of 4,177.82. In the FX market, the USD/JPY cross experienced muted fluctuations, remaining locked in a historic weak-yen zone in the upper 161 yen range, sustained by persistent greenback demand driven by widening yield differentials. On the macroeconomic front, Japan's preliminary balance of payments data for May released today by the Ministry of Finance showed a current account surplus of 2.8432 trillion yen, expanding from a year earlier, while the trade balance remained in deficit due to the weak yen.

On July 8, 2026, the Nikkei 225 snapped its winning streak to close down 362.50 yen at 72,393.57 yen. Profit-taking dominated the market following the previous day's record high, while investors engaged in portfolio rebalancing ahead of major U.S. inflation data releases scheduled for later this week. The TOPIX also declined, dropping 20.50 points to 4,141.68. In the FX market, the USD/JPY cross hovered in a historical weak-yen zone in the upper 161 yen range, sustained by persistent greenback demand driven by widening yield differentials. On the macroeconomic front, Japan's preliminary monthly labor survey for May released today showed that nominal wages rose 1.9 percent year-on-year; however, real wages adjusted for inflation decreased by 1.4 percent from a year earlier, marking the 26th consecutive month of decline.

On July 7, 2026, the Nikkei 225 rebounded sharply to close up 741.83 yen at a fresh historic high of 72,756.07 yen, breaking its record for the first time in three sessions. Following overnight gains across major Wall Street indexes, buying dominated the Tokyo market from the opening bell, particularly centering on leading semiconductor stocks and high-tech shares related to autonomous driving and generative AI technologies. The TOPIX also advanced significantly by 39.46 points to a record high of 4,162.18. In the FX market, the USD/JPY cross hovered firmly in a historic weak-yen zone in the upper 161 yen range, sustained by persistent greenback demand amid expectations of widening yield differentials. On the macroeconomic front, Japan's May household spending data released today revealed that real expenditures for households with two or more persons fell 0.5 percent year-on-year due to rising prices, highlighting lingering caution in domestic private consumption.

On July 6, 2026, the Nikkei 225 snapped a two-day winning streak to close down 420.15 yen at 72,014.24 yen. Following consecutive historic highs reached late last week, profit-taking dominated the Tokyo market due to near-term overheating anxieties. Investor cautiousness grew ahead of major U.S. inflation data releases scheduled for later this week, leading to a wait-and-see attitude. The TOPIX also declined, dropping 15.22 points to 4,122.72. In the FX market, the USD/JPY cross experienced muted fluctuations, remaining locked in a historic weak-yen zone in the upper 161 yen range, sustained by persistent greenback demand amid expectations of prolonged high interest rates by the Federal Reserve. In the domestic bond market, the benchmark 10-year government bond yield finished flat from the previous weekend at 1.090 percent, reflecting ongoing market wariness over future rate hikes by the Bank of Japan.

On July 4, 2026, while major financial markets were closed for Saturday, the global financial landscape adjusted to the lingering effects of Friday's market movements. With Wall Street and U.S. bond markets closed on Friday in observance of the Independence Day holiday, the Tokyo market entered the weekend on a strong note, where the Nikkei 225 had extended its gains on July 3 to close up 218.41 yen at a fresh historic high of 72,434.39 yen. In the FX market, steady demand for the greenback fueled by the Federal Reserve's hawkish stance and widening yield differentials kept the USD/JPY cross locked in a historical weak-yen zone in the upper 161 yen range to end the week. In the domestic bond market, the benchmark 10-year Japanese government bond yield maintained its elevated level at 1.090 percent due to lingering rate hike speculation, keeping market participants highly attentive to interest rate trends and currency depreciation ahead of the new trading week.

On July 3, 2026, the Nikkei 225 extended its gains to close up 218.41 yen at a fresh historic high of 72,434.39 yen. While the Tokyo market opened with muted fluctuations amid a shortened pre-Independence Day session on Wall Street, continuous buying in semiconductor-related shares supported the benchmark index. The TOPIX also reached a record high for the second consecutive session. In the FX market, the USD/JPY cross hovered in a historic weak-yen zone in the upper 161 yen range, driven by persistent demand for the greenback fueled by widening yield differentials and the Federal Reserve's hawkish policy outlook. On the macroeconomic front, the government's June consumer confidence survey released today showed a slight improvement in the consumer perception index. In the domestic bond market, the benchmark 10-year government bond yield rose to 1.090 percent, reflecting persistent market wariness over future rate hikes and a reduction in bond purchases by the Bank of Japan.

On July 2, 2026, the Nikkei 225 rebounded to close up 783.28 yen at 72,215.98 yen. Following overnight gains across major Wall Street indexes, buying dominated the Tokyo market from the opening bell, particularly centering on high-tech and automotive shares. Continuous inflows into leading semiconductor stocks, driven by expanding demand for generative AI and data centers, significantly pushed the benchmark higher. The TOPIX also advanced by 35.12 points to 4,137.94. In the FX market, the USD/JPY cross remained locked in a historic weak-yen zone around 161.80 yen, sustained by persistent greenback demand amid expectations of prolonged high interest rates by the Federal Reserve and widening yield differentials. In the domestic bond market, the yield on the benchmark 10-year government bond rose to 1.085 percent, reflecting lingering market speculation over future interest rate hikes by the Bank of Japan.

On July 1, 2026, the Nikkei 225 snapped a two-day rally to close down 210.45 yen at 71,432.70 yen. Although the Tokyo market opened higher tracking overnight gains in U.S. tech shares, profit-taking dominated after the Bank of Japan's June Tankan survey revealed that the Business Conditions Diffusion Index (DI) for large manufacturers stood flat at plus 13, prompting cautious sentiment regarding the economic outlook. In the FX market, the USD/JPY cross remained locked in a historic weak-yen zone in the upper 161 yen range, driven by persistent buying of the greenback amid widening yield differentials. On the macroeconomic front, Japan's June domestic new vehicle sales rose 2.1 percent year-on-year to 398,200 units, demonstrating that while the impact of shipment suspensions due to certification irregularities was easing, the supply chain is still in the process of recovery.