Japan

Intelligence for Better Decision Making

Tokyo stocks reach historic highs as semiconductor rally drives market surge
Jan. 15, 2026 | Financial System

Tokyo’s stock market reached new record highs, propelled by a rally in semiconductor stocks.

**On January 14, Tokyo’s Nikkei 225 opened at 54,050.38 yen—its first entry into the 54,000 range—and climbed 501.22 yen from the previous close.**
For the second day in a row, the index set fresh peaks, closing the morning session at 54,413.92 yen (up 864.76 yen) and reopening in the afternoon at 54,461.07 yen near all-time highs.

**Semiconductor-related shares led the advance, supported by a three-day surge in the US Philadelphia Semiconductor Index.**
Advantest added roughly 330 yen to the Nikkei as the largest single-stock contributor, while Tokyo Electron, FANUC and Yaskawa Electric posted strong gains as investors poured into technology, machinery and precision instruments.

**Investors drew optimism from several supportive factors.**
The yen traded in the low 159-per-dollar range, bolstering exporters’ competitiveness. Geopolitical tensions drove gold above 26,000 yen per gram. Expectations for aggressive fiscal measures under Prime Minister Sanae Takaichi—and a possible snap lower-house election to solidify her mandate for expanded spending—spurred buying in infrastructure-related sectors.

**Trading volume in Tokyo reached 1.19 billion shares with a total value of 3.4782 trillion yen.**
Market breadth skewed positive, with 175 Nikkei components advancing, 47 declining and three unchanged. Mining, precision instruments, machinery and glass and stone products led sector gains, while information and communications, fisheries/agriculture/forestry and land transportation lagged.

**Other Tokyo benchmarks also rose.**
The TOPIX gained 31.40 points to close at 3,630.29, and the Standard TOP20 extended its rally on heavy volume of 318.87 million shares. In contrast, the Growth 250 and Growth Core indices slipped as investors took profits in smaller-cap and growth-oriented stocks.

**Large-cap performance diverged: Advantest, Fast Retailing and Tokyo Electron lifted the market, but a steep drop in SoftBank Group shaved about 158 yen off the Nikkei, and TDK, Daiichi Sankyo and Toyota also retreated.**
This shift reflected sector rotation as investors reallocated toward policy-sensitive and export-benefit plays amid evolving domestic and global economic and political dynamics.
Yen Slides Toward 159 Amid Fiscal Uncertainty and Snap Election Signals
Jan. 15, 2026 | Macroeconomics & Growth

The yen’s fluctuating exchange rate against the dollar reflects growing concerns over Japan’s fiscal policy and market volatility.

**On January 12, Japanese Finance Minister Satsuki Katayama met US Treasury Secretary Scott Bessent in Washington to express shared concern over the yen’s recent steep depreciation.**
Katayama stressed Japan’s serious worry as the currency weakened to a one-year low, and Bessent agreed on the need for coordinated foreign-exchange policy and continued dialogue.

**The yen’s decline accelerated after reports that Prime Minister Sanae Takaichi would dissolve the House of Representatives and call a snap general election for February 8.**
Traders anticipated her administration would pursue more aggressive expansionary fiscal measures, stoking worries about Japan’s fiscal health and prompting widespread yen selling.

**In New York’s FX market on January 13, the yen traded around ¥158.74–158.84 per dollar before weakening to roughly ¥159.11–159.21 in subsequent sessions.**
The euro hovered near ¥185.2–¥185.3, while the benchmark 10-year Japanese government bond yield briefly climbed to 2.150%, its highest level since February 1999. Japanese equities rallied alongside the falling yen: the Nikkei index surged more than 3% intraday to close at 53,623.09, and the Topix gained 2.44% to finish at 3,599.73.

**Traders briefly bought yen after the US December Consumer Price Index showed a 2.7% year-on-year increase, but dollar strength returned as political and fiscal uncertainty in Japan dominated sentiment.**
The dollar index rose to 99.15, while the euro and pound weakened.

**Market participants warn that any move toward the key ¥160 level could spur Japanese foreign-exchange intervention.**
Steven Jen of Eurizon SLJ Capital notes the market skew favors further yen losses, suggesting intervention could trigger a sharp rebound. Kit Jacks of Société Générale views a breach past ¥160 as a short-selling opportunity, pointing out that Japanese authorities focus more on volatility and the pace of moves than on fixed exchange-rate thresholds.

**Analysts expect yen selling to persist alongside anticipated expansionary fiscal policy.**
While cash intervention offers a deterrent, they see limited scope for large-scale operations. Instead, verbal warnings may serve to delay further declines rather than fund major market intervention.

Monitored Intelligence for Japan - Jan. 16, 2026


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Pacts, patronage and fear: how Myanmar’s junta chief holds on to power

Asahi Shimbun - E | English | News | Jan. 16, 2026 | Geopolitical Conflict and Disputes

Myanmar’s junta chief, Min Aung Hlaing, continues to exert significant influence over the country’s general election, despite not being a formal candidate or campaign figure. Since leading a 2021 coup that ousted Aung San Suu Kyi’s government and triggered a violent civil war, Min Aung Hlaing remains the acting president and leader of Myanmar, maintaining his grip on power through a combination of elite management, political maneuvering, and military control. Opposition parties have been marginalized or banned, and the elections are widely criticized by the United Nations and Western rights groups as neither free nor fair.

Min Aung Hlaing manages his hold on power through strategic elite pacts within the military, rewarding loyalists with lucrative positions and sidelining potential rivals. Diplomatic backing from China has helped the junta maintain some operational stability and enhanced Min Aung Hlaing’s international standing, particularly as he seeks to re-engage with neighboring countries and rebuild relations with the ASEAN bloc. His foreign minister, a trusted retired officer and former U.N. ambassador, has played a key role in coaching him through this diplomatic emergence.

The general’s political ambitions predate the coup, with a history of engagement beyond traditional military roles, reflecting a belief in the military’s role as protector of national unity and majority ethnic and religious interests. Min Aung Hlaing justified the coup by accusing Suu Kyi, now imprisoned and reportedly in poor health, of ignoring his concerns. Efforts by regional leaders to negotiate her release have been firmly rejected by the junta.

While Min Aung Hlaing has signaled intentions to eventually transfer state responsibilities to a new government, he is expected to remain influential behind the scenes, potentially moving into a fully political role rather than maintaining direct military command. Early election results favor military-backed parties, indicating continuity in governance style. Analysts suggest that even new military leadership is unlikely to pursue a fundamentally different approach to opposition forces or the ongoing resistance movement.

Government panel proposes mandatory integration program for foreign residents

Japan Times | English | News | Jan. 16, 2026 | UndeterminedDemographics

A government panel in Japan has proposed establishing a mandatory integration program for foreign residents. The panel also recommends collecting data on real estate ownership by non-citizens. These proposals were detailed in a report submitted to Immigration Minister Kimi Onoda by the panel’s chair, Reiko Hayashi, director-general of the National Institute of Population and Social Security Research.

The meeting between Minister Onoda, who also oversees societal harmony with foreign nationals, and Hayashi occurred amid Prime Minister Sanae Takaichi’s administration’s efforts to reset policies concerning foreign nationals. This includes improving language programs and introducing new restrictions on real estate purchases, citing national and economic security considerations.

過度な為替変動望まず 米財務長官、日米会談で

US Treasury Secretary does not want excessive currency fluctuations in Japan-US talks

Tokyo Shimbun | Local Language | News | Jan. 16, 2026 | Geopolitical Conflict and Disputes

On January 12, 2026, U.S. Treasury Secretary Besent met with Japanese Finance Minister Satsuki Katayama in Washington, where Besent emphasized that excessive exchange rate fluctuations between the yen and the dollar are undesirable. Katayama responded on January 14, indicating that Japan is prepared to take appropriate measures, including unspecified options, to address movements in the yen's weakness and the dollar's strength, particularly those driven by speculative activities.

The yen has been weakening amid concerns that Japan's aggressive fiscal policies under Prime Minister Sanae Takaichi could worsen public finances. The yen was trading in the low 158-yen range against the dollar in the Tokyo foreign exchange market on January 15, 2026.

Additional economic updates include a 3.2% rise in corporate goods prices in 2025, stabilization in rice and food and beverage prices, and a drop of 470 yen in the Nikkei Stock Average as of the morning of January 15. Separately, there are developments in U.S.-China trade tensions regarding AI semiconductors and U.S. directives addressing critical minerals due to national security concerns.

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