Japan Equity Strategy: Rising Correlation Between the Nikkei 225 and KOSPI, and the Outlook Ahead

Research evidence excerpt

Japan Equity Strategy: Rising Correlation Between the Nikkei 225 and KOSPI, and the Outlook Ahead

J P M O R G A N Global Markets Strategy

27 July 2026

Japan Equity Strategy

Rising Correlation Between the Nikkei 225 and

KOSPI, and the Outlook Ahead

Stronger correlation between Nikkei 225 and KOSPI Equity Strategy

The correlation between the Nikkei 225 and KOSPI has been strengthening, Rie Nishihara AC

evident both during the feverish rally in April–June and the subsequent correction (81-3) 6736-8629

phase in July. Figure 1CorelationBetwentheNikeiAverageandKOSPI shows that the correlation between the two markets has been rie.nishihara@jpmorgan.com

JPMorgan Securities Japan Co., Ltd.

rising since 2025, compared to the 2022–2024 average. One key factor is the

growing weighting of the market cap of Samsung Electronics and SK Hynix within Yong Guo, CFA

(81-3) 6736-8623

KOSPI, which has strengthened the correlation with the Nikkei Semiconductor yong.guo@jpmorgan.com

Index (an AI semiconductor index of 30 companies, accounting for about one-third JPMorgan Securities Japan Co., Ltd.

of the Nikkei 225's market capitalization). The KOSPI surged in February 2026, Mansi Das

when Bloomberg consensus estimates for US hyperscaler capital expenditures (91) 2261 573343

began to be rapidly revised upward, and again after the April earnings mansi.das@jpmchase.com

announcements (Figure 2CapexofUSHyperscalersandJapan/KoreaStockIndices). This was followed by a shift of AI tech fund flows into J.P. Morgan India Private Limited

the Nikkei Semiconductor Index and the Nikkei 225, driving Japanese

semiconductor share prices higher. In June, the pace of gains in the Nikkei

Semiconductor Index even outpaced KOSPI’s earlier surge. Kioxia Holdings,