Nikkei 225

Japan Inflation Rate Edges Higher, But Still Modest in March

Japan's consumer price index (CPI) edged higher in March, boosted by food and energy costs, but remained relatively moderate, reported the Statistics Bureau on Friday.The nation's widely quoted CPI-core, which strips out fresh food bills, rose 1.8% in March on year, up from 1.6% in February, but still below the 2% annual inflation target of the Bank of Japan.Japan's CPI-core-core, which also strips out energy bills, rose 2.4% in March, modestly easing from a 2.5% rise in March.The nation's headline CPI rose 1.5% in March on year, accelerating from February's near four-year low gain of 1.3% on year, added the Statistics Bureau.Housing rent increases remained modest in Japan, rising 0.7% on year in March, while electricity bills fell 8% on year, the latter decline due to government subsidies.Rice, which in mid-2025 has nearly doubled in price, rose 6.8% on year in March, and fell 2.5% from February.The Bank of Japan will hold a policy session next week and is expected to reveal on Tuesday what adjustments will be made to its key policy rate, which has been kept at 0.75% since December of last year.Japan's central bankers have indicated intentions to lift rates but also to keep labor markets tight enough that real wages rise, thus boosting consumption and the overall economy."We still see an April hike possible if the BoJ gives priority to preventing inflation expectations from accelerating," said ING Think, an arm of the Dutch investment house. "We expect further inflation acceleration in the coming months. On top of rising global energy prices, the weak Japanese yen should add more pressure on domestic prices."

S&P Sees Strong Earnings for Japan's Major Electronics Producers Amid Diversification Efforts

Japanese diversified electronics makers will see robust earnings in the next few years as they compete with peers abroad through efforts that boost and diversify business segments, S&P Global Ratings said in a recent release.The eight major players in the segments have adjusted their business focus over the past 10 to 15 years, resulting in steadier and more profitable business blends, the rating agency said.These changes involve a shift from traditional electronics products to non-electronics segments such as entertainment, service solutions, IT services, and branded consumer appliances.The nontraditional segments offer steady income from subscriptions, long-term contracts, after-sales services, and customer loyalty, S&P said.A narrower risk of technological innovation in these areas also makes sustaining a competitive advantage easier, according to S&P.The major companies include Sony Group (TYO:6758), Hitachi (TYO:6501), Mitsubishi Electric (TYO:6503), Panasonic Holdings (TYO:6752), NEC (TYO:6701), Fujitsu (TYO:6702), Toshiba (TYO:6588), and Sharp (TYO:6753).Further portfolio review and bolstering will be crucial for the companies' credit quality amid elevated competition abroad and a fast-changing business environment, S&P said.Ensuing growth investments could hit the companies' financial metrics, although controlled financial management should be a mitigating factor, S&P said.The rating agency expects the companies to broadly cover expenditure with operating cash flow, with potential asset sales to ease a marked rise in financial burden.

Japan Shares Rise as as Contained March Inflation Dampens Rate Hike Fears

Japanese shares closed nearly 1% higher on Friday after data showed inflation remained contained in March, reinforcing expectations that the Bank of Japan will refrain from raising interest rates next week.The Nikkei 225 rose nearly 1%, or 575.95 points, to close at 59,716.18.Core consumer prices, excluding fresh food, rose 1.8% year on year in March, matching forecasts and accelerating from 1.6% in February. Energy subsidies continued to limit price pressures despite higher fuel costs linked to Middle East tensions.The data showed energy prices fell 5.7%, a smaller drop than the previous month, while nonperishable food inflation eased. A separate core-core gauge, which strips out energy, rose 2.4%.On the corporate front, Shares of Daiichi Sankyo (TYO:4568) fell about 10% after the company delayed its earnings release and five-year plan while reviewing oncology supply plans, even as it raised its full-year profit outlook on foreign exchange gains.Shares of Renesas Electronics (TYO:6723) dropped about 5% despite reporting a 162% jump in first-quarter profit and strong revenue growth, with the company flagging near-term volatility and issuing only a six-month outlook.Shares of SoftBank Group (TYO:9984) rose 2% after a report said its mobile unit plans to convert part of an Osaka plant into a large-scale battery production site to support AI data centers.

Market Chatter: Japan Seeks to Scale Up Drone Production With Startup Support

Japan is moving to develop a domestic drone industry that can scale production in emergencies and strengthen national security, with the Ministry of Defense planning to support startups and expand civilian manufacturing capacity, Nikkei reported Friday.Under a new program by the Acquisition, Technology & Logistics Agency, drone prototypes will be tested in Self-Defense Forces exercises, with feedback on performance to help companies prepare for mass production, the report said.Domestic players such as ACSL (TYO:6232) and Terra Drone (TYO:278A) have emerged, but limited production infrastructure and heavy reliance on Chinese suppliers, led by DJI, remain key gaps, according to the report.The government plans to reflect the push in an updated security strategy while addressing regulatory hurdles that constrain drone testing and development, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Hormuz Disruption Tightens Japan Medical Supply Chain

Disruptions to oil flows through the Strait of Hormuz are rippling through Japan's healthcare supply chain, constraining access to plastic-based items such as gloves and dialysis tubing and underscoring heavy import dependence, Nikkei reported Friday.Smaller clinics are seeing tighter availability, with some turning to online channels where buying limits have emerged, including at Askul (TYO:2678). The Ministry of Health, Labour and Welfare has received thousands of requests for assistance and plans to release stockpiled gloves, according to the report.Japan relies on imports for over 99% of medical gloves, with production concentrated in Southeast Asia, particularly Malaysia, while naphtha-based plastics remain central to most medical equipment, the report said.Supply remains adequate for now, but costs are rising and suppliers are signaling increases, while hospitals flag a weakening outlook. The government is preparing financial support to help Southeast Asia secure energy supplies and stabilize flows of critical materials, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Japan Banks Line Up 250 Billion Yen in First Funding for US Projects

The Japan Bank for International Cooperation (JBIC), along with MUFG Bank (TYO:8306), Sumitomo Mitsui Banking (TYO:8316), Mizuho Bank (TYO:8411) are arranging about 250 billion yen for initial U.S. project financing under a bilateral framework, Nikkei reported Friday.Funds will go to three projects worth about $36 billion, including a gas-fired plant in Ohio, an oil facility in Texas and a synthetic diamond site in Georgia, according to the report.JBIC will provide about one-third, with the rest backed by Nippon Export-Import Insurance guarantees. The Ohio project, led by SoftBank Group (TYO:9984), may receive about 220 billion yen first, with lending to expand in stages, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan Stocks Open Higher on Iran Talks, Lebanon Ceasefire Extension

Japanese shares slightly rose at the start of Friday's session, as investors remain cautiously optimistic on the U.S.-Iran negotiations after an extended ceasefire between Israel and Lebanon.The Nikkei 225 rose 267.2 points or 0.5% to open at 59,407.44President Donald Trump announced a three-week extension of the ceasefire between Israel and Lebanon, yet investors stayed wary as market direction depends on whether tensions with Iran intensify or move toward diplomatic solutions.The West Texas Intermediate climbed to about $97 a barrel, while Brent Crude closed at nearly $105 on Thursday.At home, Japan's core inflation accelerated to 1.8% in March from 1.6% the previous month, driven by higher energy costs-a trend that could affect the Bank of Japan's decision to leave its benchmark rate unchanged coming Tuesday.

Japan's Core Inflation Picks Up in March at 1.8%

Japan's core inflation edged up in March, with the core consumer price index rising 1.8%, up from 1.6% the month prior amid higher energy prices, data from the country's Statistics Bureau showed on Friday.The reading, which doesn't count prices of fresh food items, remains below the Bank of Japan's 2% target for the second consecutive month.Excluding both energy and fresh food items, Japan's inflation slipped to 2.4% in March from 2.5% the previous month.The headline consumer price index, which includes all items, gained 1.5% during the month under review compared with 1.3% in February.The increase in food prices, excluding fresh food prices, eased to 5.2% in March, from 5.7% the month before.Energy prices contracted 5.7% during the month compared with the 9.1% contraction in the month prior.

Japan Core Inflation Quickens to 1.8% in March

Rising Crude Prices Lower Asian Stock Markets

Asian stock markets largely tracked lower Thursday as traders weighed rising crude oil prices and awaited clarity on Persian Gulf hostilities.Hong Kong, Shanghai, and Tokyo finished in the red, as did most other regional exchanges.Brent crude prices continued to climb during market hours, striking $103.80 a barrel, up 1.9%.In Japan, the Nikkei 225 opened higher but lost momentum, finishing off 0.7% despite continued strength in tech- and AI-connected shares.The benchmark Nikkei 225 fell 445.63 to 59,140.23, as losing issues outnumbered gainers 173 to 48.Leading the upside was semiconductor maker Socionext, gaining 7.1%, while camera house Nikon declined 10.4%.In economic news, Japan's flash composite purchasing manager index (PMI), a combination of the nation's factory and service sectors, logged at 52.4 in April, down from 53.0 in March, but still striking above the 50-mark that separates growth from contraction, reported S&P Global.In Hong Kong, the Hang Seng Index opened lower and could not recover, closing down 1% as traders monitored reports on the still-closed Strait of Hormuz.The broad gauge Hang Seng fell 248.04 to 25,915.20, as losing issues outnumbered gainers 63 to 25. The Hang Seng TECH Index lost 2% on the day, while the Mainland Properties Index fell 0.6%.Leading the upside was PetroChina, gaining 4.2%, while Innovent Biologics declined 5.9%.On the mainland, the Shanghai Composite fell 0.3% to 4,049.25.On the other regional exchanges, the South Korean KOSPI rose 0.9%; the Taiwan TWSE declined 0.4%; the Australian ASX 200 declined 0.6%; the Singapore Straits Times Index fell 1.2%, and the Thai Set declined 1.2%. In late trading in Mumbai, the Sensex was down 1.2%The MSCI All Country Asia Pacific Index fell 0.6% on the day.In other news, India's flash seasonally adjusted composite purchasing manager index (PMI) for output, a combination of the nation's factory and service sectors, logged at 58.3 in April, up from 57.0 in March, reported S&P Global.

Market Chatter: Japan Draws International Interest in Retired Military Gear After Exports Rule Change

Japan is drawing foreign interest in its retired defense gear after a landmark relaxation of export rules, Nikkei Asia reported Thursday, citing chief cabinet secretary Minoru Kihara, Prime Minister Sanae Takaichi's top spokesperson.On Tuesday, Takaichi's cabinet and the National Security Council approved amendments to the government's "three principles on transfer of defense equipment and technology," permitting lethal weapon exports for the first time since World War II, the news daily said.Kihara, in a Nikkei Asia interview, said that while Japan remains dedicated to its peaceful principles, transferring such equipment will help strengthen regional deterrence and response capabilities.Previously restricted to five non-combat areas-rescue, transport, warning, surveillance, and minesweeping-the revised policy now allows exports of military hardware, including missiles and destroyers, the publication said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan Manufacturing Up, Services Slow In April: PMI Report

Providing an early window into Japan's economy since Persian Gulf hostilities, Japan's private sector sustained an expansion in April, led by manufacturing, reported S&P Global on Thursday.Japan's flash composite purchasing manager index (PMI) for output, a combination of the nation's factory and service sectors, logged at 52.4 in April, down from 53.0 in March, but still striking above the 50-mark that separates growth from contraction, reported S&P Global, citing its monthly survey.Japan's flash manufacturing PMI rose to 54.9 in April, up from 51.6 in March, while the nation's services PMI registered at 51.2 in April, off from 53.4 in the previous month, added S&P Global."While (Japan's) services companies reported weaker growth of both activity and sales at the start of the second quarter, manufacturers signaled the steepest rise in output in over 12 years amid a solid uptick in new work," said S&P Global.Japan's private enterprises again added to payrolls in April, but had trouble keeping up with orders."In line with the trends seen for output and new work, Japanese companies expanded their head-counts modestly in April. Overall employment has now risen consistently for just over two-and-a-half years," advised S&P Global. "Signs of capacity pressure persisted, however, as levels of outstanding business increased for the fifth straight month."Japan's business managers also reported higher costs of operation in April.Surveyed companies "often highlighted higher prices for staff, raw materials, fuel and energy. The latter were in turn linked to developments in the Middle East and a weak yen exchange rate," said S&P Global.The Middle East outlook also clouded Japan's business manager optimism in April."Business confidence regarding future output weakened for the second successive month in April, with overall optimism the lowest recorded since August 2020 during the COVID-19 pandemic," said S&P Global. "While Japanese firms were generally hopeful that demand conditions will strengthen globally, uncertainty and disruption to markets due to the war in the Middle East dampened forecasts at some firms."The flash Japan PMI report was is compiled by S&P Global from survey sent to 400 manufacturers and 400 service providers from April 9 through April 21.

Japan Stocks Close Lower After Nikkei Briefly Tops 60,000

Japanese equities closed in negative territory on Monday, reversing early gains after the benchmark briefly crossed the 60,000 level, as profit-taking set in following a tech-led rally and easing geopolitical risk tied to the extended Iran-U.S. ceasefire.The Nikkei 225 ended 0.75% lower, or fell 445.63 points, to close at 59,140.23.The decline came as investors reassessed geopolitical risks and tracked softer U.S. futures, despite no further escalation in the Middle East.The Nikkei 225 briefly hit a record 60,013.98, with early gains supported by an extended Iran-U.S. ceasefire. While the ceasefire was prolonged following mediation efforts, tensions persisted as a U.S. naval blockade remained in place and Iran seized two vessels in the Strait of Hormuz.In economic news, Japan's private sector growth slowed to a four-month low in April as a surge in manufacturing-driven by supply concerns-was offset by softer services activity, with the S&P Global Flash Japan PMI Composite Output Index easing to 52.4 from 53.Rising input costs linked to energy and a weak yen pushed prices higher, while business confidence fell to its lowest level since August 2020 amid Middle East uncertainty.On the corporate front, Japan Petroleum Exploration (TYO:1662) rose 9% after outlining plans to boost oil and gas output to 180,000 bpd by 2035 with a 1.16 trillion yen investment, shifting focus toward energy security.Toyota Motor (TYO:7203) fell 2% after a report said it is reviewing a potential data breach involving seconded staff from insurers under Tokio Marine (TYO:8766) and MS&AD Insurance Group (TYO:8725).Note (TYO:5243) dropped 8% after its founder sold 2.8% of outstanding shares in a move aimed at improving stock liquidity.

Market Chatter: Japan Retailers Step Up Cost Cuts as Energy Prices Rise

Japanese retailers are tightening operations to manage rising fuel and electricity costs, even as the government works to secure energy supplies, Nikkei reported Thursday.Itochu (TYO:8001) unit FamilyMart is weighing a reduction in store deliveries to cut transport expenses, while Lawson plans a gradual shift to hybrid and electric vehicles. Both chains are also investing in energy-efficient equipment to limit cost pressures, according to the report.Aeon (TYO:8267) is bringing forward investments in solar panels and efficient air-conditioning, and accelerating a transition to lower-power refrigeration systems across stores, the report said.The moves come as utilities prepare to pass on higher fuel costs to electricity bills from June, alongside seasonal demand for cooling. Government fuel subsidies have offered some relief, but their duration remains uncertain, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Prudential Life Extends Sales Halt in Japan Amid Probe

Prudential Life Insurance extended its suspension of new policy sales in Japan by 180 days to early November as it works to address misconduct involving employees, Nikkei reported Thursday.The insurer said more than 100 current and former staff received about 3.1 billion yen from customers through improper means. The halt on sales has been in place since early February, according to the report.Japan's Financial Services Agency has started an on-site inspection of the group's local holding company, reviewing governance and compliance, the report said.Prudential Life plans changes, including clearer roles for executives and branch managers and a shift away from commission-based pay for sales staff. Compensation will be linked more closely to factors such as policy retention and compliance, according to the report.Complaints are also being reviewed at affiliate Gibraltar Life Insurance, with groupwide cases reaching roughly 700. The parent company expects the extended suspension in Japan to reduce pre-tax adjusted operating income by as much as $575 million this year, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan's Manufacturing Output Growth Hits 12-Year High; Service Sector Expansion Slows

Japanese manufacturing output rose at its steepest rate since February 2014, although this rebound was tempered by a slower expansion in service sector activity, pulling overall private sector growth to its weakest pace in four months during April.The S&P Global Flash Japan PMI Composite Output Index dipped to 52.4 in April from 53.0 in March, remaining above the 50.0 threshold that separates expansion from contraction.While total activity has now expanded for 13 consecutive months, the latest reading marked the softest rate of growth seen so far in 2026.Some manufacturers raised output due to concerns over future supply shortages linked to the Middle East war, contributing to the sharp manufacturing uptick.In contrast, service sector activity grew at its mildest pace in 11 months, while new export business at the composite level rose at the slowest rate in four months.Employment continued its steady rise for over 2.5 years, though capacity pressures persisted as outstanding business levels increased for the fifth straight month.Average input costs surged at the sharpest rate since January 2023, driven by higher prices for staff, raw materials, fuel, and energy-often tied to Middle East developments and a weak yen.Goods producers experienced notably steeper cost inflation than service providers, pushing average output charges to rise at the quickest pace since composite data began in late 2007.Business confidence regarding future output weakened for the second consecutive month, falling to its lowest level since August 2020 due to uncertainty and market disruption from the Middle East war.

Market Chatter: Japan to Unveil New Indo-Pacific Plan in Vietnam

Japan is preparing to roll out a revised Indo-Pacific strategy that places supply chain resilience and economic security at its core, with Prime Minister Sanae Takaichi set to present the plan during a visit to Vietnam, Nikkei reported Thursday.The trip, which also includes Australia, will focus on strengthening regional cooperation, particularly with Southeast Asian economies. The updated framework reshapes the approach first introduced in 2016 to reflect intensifying rivalry over critical technologies and resources, according to the report.At the center of the plan are efforts to secure key materials such as rare earths, diversify energy sourcing, and reduce exposure to disruptions seen during recent global crises. Japan also aims to expand collaboration in areas such as artificial intelligence, semiconductors and quantum technology through greater public and private investment, the report said.Security ties will be reinforced through expanded use of defense assistance programs that supply equipment to partner countries, alongside development aid to deepen economic links, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japanese Equities Rise at Open on Wall Street Record Gains, Indefinite Iran Ceasefire

Japanese stocks rose at Thursday's open, following Wall Street's record climb fueled by strong earnings and U.S. President Donald Trump's statement that the Iran ceasefire would continue indefinitely.The Nikkei gained 172.8 points or 0.3% to open higher at 59,758.64, with the S&P 500 jumping 1.1% to a record the night prior, marking its best month since 2020.Investors' risk appetite was further supported by robust U.S. company results, including a jump in Boeing's shares following solid first-quarter delivery figures.Market sentiment was further boosted after Trump extended the Iran truce, stepping back from earlier threats of resuming bombing Iran if no deal was reached by Wednesday's deadline.Attention now shifts to whether diplomatic talks can restart and eventually lead to an agreement between the two sides.

Persian Gulf Outlook Roils Asian Stock Markets

Asian stock markets turned in a choppy Wednesday as traders weighed a unilateral extension of a Persian Gulf ceasefire by US President Donald Trump, but also the ongoing closure of the Strait of Hormuz, through which the Asian Pacific receives much of its crude and LNG.Shanghai and Tokyo finished in the green, while Hong Kong fell back. Other regional exchanges were also uneven.In Japan, the Nikkei 225 opened lower, but rose to the close, finishing up 0.4% and striking a fresh all-time zenith, as tech issues rallied.The benchmark Nikkei 225 rose 236.69 to 59,585.86, though losing issues outnumbered gainers 181 to 41, as the rally was concentrated shares exposed to AI-outlooks.Leading the upside was tech-financier SoftBank, up 8.5%, while beverage house Sapporo declined 5.2%.In economic news, Japan logged an international trade deficit of $10.7 billion in the fiscal year ended March 31, remaining in the red for the fifth straight year, reported the Ministry of Finance.In Hong Kong, the Hang Seng Index opened lower and declined in trading, closing down 1.2% on weakness in tech shares.The broad gauge Hang Seng fell 324.24 to 26,163.24, as losing issues outnumbered gainers 70 to 20. The Hang Seng TECH Index lost 1.9% on the day, while the Mainland Properties Index fell 0.2%.Leading the upside was computer-maker Lenovo, gaining 5.7%, while Contemporary Amperex Technology dropped 5%.On the mainland, the Shanghai Composite rose 0.5% to 4,106.26.On the other regional exchanges, the S. Korean KOSPI rose 0.5%; the Taiwan TWSE inclined 0.7%; the Australian ASX 200 declined 1.2%; the Singapore Straits Times Index fell 0.2%, and the Thai Set declined 0.2%. In late trading in Mumbai, the Sensex was down 1%.The MSCI All Country Asia Pacific Index fell 0.6% on the day.

S&P Sees Growth Among Japan's Real Estate Majors to Continue

Japan's major real estate companies will continue to grow amid a further increase in office rents, especially in major cities, S&P Global Ratings said in a recent release.A robust domestic market and competitive portfolios will support steady growth for the real estate majors over the next few years, S&P said.The majors will have slightly better interest coverage compared to peers abroad, given their diversified debt maturity profiles and solid funding bases, the rating agency said.However, new supply in central Tokyo, a core market, will continue to be relatively narrow within the next few years, S&P said.The majors' ability to further raise rents to balance increasing interest costs will be crucial for their creditworthiness, the rating agency said.