A two-day rally led by chip stocks pulled the Nikkei 225 back to 68,557.73 by Friday, but 21 of 33 Tokyo industry groups still fell that day. A weak yen is splitting the market between exporters and domestic names, with the Bank of Japan's July 30 meeting now in focus.
Japan's Nikkei 225 closed the week at 68,557.73 points, a 1.20% gain on Friday that masked a 1.70% loss from the previous Friday. The index slid for three days, touching 66,819.05 on Wednesday before a two-day rally led by semiconductor heavyweights erased most of the damage. Beneath the rebound, though, 21 of the 33 industry groups on the Tokyo exchange fell on Friday.
Chip stocks drove a narrow rebound
The turnaround began Thursday, when the Nikkei jumped 1.38% to 67,744 and the broader Topix added 0.35% to 4,020. A rally in U.S. chip stocks spilled over to Tokyo, amplified by news that SK Hynix's New York IPO was more than seven times oversubscribed. Despite Bain Capital selling its entire stake in Kioxia Holdings, the stock still rose more than 8%.
Friday's push was more selective. SoftBank Group soared 10.65% to 6,370 yen, and just three stocks — SoftBank, Tokyo Electron and Advantest — contributed roughly 1,000 points of the day's gain. Among smaller names, SUMCO Corp. surged 15.40% to 5,244 yen.
A weak yen splits the market
Losses concentrated in domestic-oriented plays, as Fast Retailing dropped 3.59% alongside Sapporo Holdings and Ryohin Keikaku. The split reflects the drag from the yen, which slid to historically low levels against the dollar. USD/JPY ended the week at 161.66, down 0.44% on Friday.
Over the past 12 months the dollar has appreciated 13% against the yen, breaking above 160 — a threshold that historically has prompted intervention from the Bank of Japan. The weak currency lifts exporters' repatriated profits but squeezes import-reliant domestic firms.
Volatility eased into the close
Anxiety receded late in the week. The Nikkei Volatility Index, which measures implied volatility on Nikkei options, had spiked to a three-month high of 43.82 points midweek but pulled back to 38.13 by Friday's close. According to Kohei Onishi of Mitsubishi UFJ Morgan Stanley Securities: "The market is difficult to read right now", as he cited technical selling and ETF dividend distributions.
Chart-watchers see a ceiling near 68,782, the old record high from June. Yet the Nikkei is up more than 72% from its 52-week low of 39,459.62 points hit in July 2025, and its relative strength index at 51.6 signals neutral territory. Traders now turn to the Bank of Japan's policy meeting on July 30, which could shift the yen and, with it, the outlook for Japan's export champions.
Source: ad-hoc-news.de
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