Japan Markets Highlights — Jul 26, 2026 | Aivina
July 26, 2026
Nikkei 225 exhibited mixed performance, showing resilience despite broader market concerns this week. The Japanese Yen continued its depreciation, reaching new multi-decade lows against the USD, intensifying speculation of potential intervention. The Bank of Japan kept its policy rate unchanged but announced plans to reduce bond purchases, fueling market expectations for a July rate hike amidst persistent inflation above target.
Highlights
- Nikkei 225 showed resilience; recovering earlier losses; closing mixed week.
- Japanese Yen weakened further; hitting multi-decade lows; prompting intervention watch.
- BOJ maintained current policy; signaled future bond tapering; eyes July rate hike.
Macro Overview
Inflation
Tokyo's core CPI for May was 2.1%, while April national core CPI was 2.2%, both persistently above the 2% target.
Interest Rate Outlook
Market expectations for a July BOJ rate hike are elevated, following bond tapering announcement and Governor Ueda's data-dependent stance.
Risk Sentiment
neutral
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