Japan equity memo: TOPIX reaches 4,000, Nikkei 225 nears 70,000

Research evidence excerpt

Japan equity memo: TOPIX reaches 4,000, Nikkei 225 nears 70,000

Global Markets Research

Japan equity memo: TOPIX reaches 4,000, Nikkei 15 June 2026225 nears 70,000

EQUITY: JAPAN STRATEGY

After initial gains, focus likely to be on effectiveness of peace Research Analysts

process and supply chains; TOPIX could outperform Macro strategy

Tomochika Kitaoka - NSC

tomochika.kitaoka@nomura.comQuick Note +81 3 6703 1815

While we think the rise in the TOPIX to above 4,000 and the Nikkei 225 to nearly 70,000

on expectations for a ceasefire in the Middle East is nothing more than a waypoint in a

longer rally, the rise in share prices on 15 June was driven by futures, and the rally in

Japanese equities stands out relative to that for other Asian equities. With the Nikkei 225

Volatility Index above 35, we think Japanese equities are likely to seesaw in the near

term. The market has already shifted to an uptrend that follows the historical pattern for

ceasefire agreements, having factored in a ceasefire somewhat early in response to the

two-week ceasefire agreement announced on 8 April, and after this initial rally on 15 June

we expect the focus to turn to the effectiveness of the peace process and the recovery in

supply networks. When monetary policy meetings are held in Japan and the US at the

same time, the TOPIX has tended to rise before the meetings, and then volatility has

tended to rise afterward.

Japanese equities rallied sharply on 15 June, characterized by: (1) rises in AI and

semiconductor stocks as interest rate hike risks receded in Japan and overseas; and (2) a

pronounced rebound in performance in the construction, air transportation, automobiles,

and tires sectors, which had been weak on concerns about cost increases. While we see