Hey everyone, Hirokichi here.
On July 21, 2026, coming off Japan’s three-day weekend, the Nikkei 225 rebounded sharply, closing 2,091 yen higher at 66,232 yen. The dollar-yen rate held in the mid-162 range, with the yen staying weak. Tonight, oil prices driven by Middle East tensions remain a risk to watch, but with Alphabet and other major tech names reporting earnings this week, US stocks may see limited downside.
Nikkei Rebounds 2,091 Yen to 66,232, Snapping a Three-Day Slide
In Tokyo trading on July 21, the Nikkei 225 closed at 66,232.19 yen, up 2,091.07 yen (+3.26%) from the previous close on July 17 (Source: ZAi FX!). The TOPIX (Tokyo Stock Price Index, which tracks the overall Tokyo Stock Exchange Prime Market) was also up 72.08 points to 3,991.29 as of the late-morning session (Source: Nikkei Shimbun).
This follows a sharp 2,694-yen drop on July 17 before the holiday, so today’s move looks like rebound buying (investors buying back into stocks seen as oversold). Semiconductor names that had been sold off heavily last week were bought back, while rising oil prices drew buying into mining and oil-related stocks, along with cyclical, value-oriented names like trading houses and insurers. A rally in Korean stocks also appears to have helped improve investor sentiment (Source: Nikkei Shimbun).
Sectors and Stocks in Focus
Notable gainers included Advantest, SoftBank Group, Fast Retailing, Kioxia Holdings, and Toyota Motor — spanning both semiconductor/tech names and resource/insurance stocks. On the other hand, Murata Manufacturing, Lasertec, Nintendo, Konami Group, and Shin-Etsu Chemical declined. By sector, oil & coal products, mining, and insurance rose, while metal products lagged (Source: Zaikei Shimbun).
Dollar-Yen Holds in the Mid-162 Range
In the foreign exchange market, the dollar-yen rate traded around 162.52 yen as of 3:00 PM Tokyo time, reflecting continued yen weakness (Source: ZAi FX!). Rising oil prices tied to Middle East tensions, along with caution about the Federal Reserve’s (the US central bank, equivalent to Japan’s Bank of Japan) tightening policy stance, appear to be supporting dollar buying. Trading stayed in a narrow range for most of the day with little clear direction (Source: OANDA Japan).
Tonight’s US Stock Market Outlook
On July 20, the Dow fell 307.16 points to 51,839.26 and the Nasdaq Composite dropped 12.17 points to 25,508.07, marking a third straight day of declines as rising oil prices tied to Middle East tensions weighed on major stocks (Source: Zaikei Shimbun).
As of 1:30 PM Tokyo time on July 21, stock index futures (contracts to buy or sell an index at a set price on a future date) showed S&P 500 futures up 29.75 points to 7,514.00 and Nasdaq 100 futures up 284.75 points to 29,063.50, while Dow futures were down 21 points — a mixed, directionless picture (Source: Zaikei Shimbun).
Ongoing concerns about oil supply stability tied to the Strait of Hormuz continue to support higher oil prices, which could bring more selling pressure. Long-term interest rates have also risen, which tends to weigh on tech stocks. That said, with Alphabet, IBM, and Intel all reporting earnings this week, investors waiting to gauge the payoff from AI-related investment may help limit how far stocks fall (Source: Zaikei Shimbun). On the economic calendar, the Philadelphia Fed Non-Manufacturing Index is due at 9:30 PM Tokyo time, alongside earnings from General Motors, 3M, and Novartis. With the FOMC (Federal Open Market Committee, which sets US monetary policy) meeting next week, markets are also likely to keep an eye on that (Source: Kabushiki Shimbun Web).
For more on how Middle East tensions and oil prices could affect Japan, I covered this in more depth in my earlier explainer on Trump’s “Guardian of the Strait of Hormuz” declaration.
Wrap-Up
Today was a sharp turnaround from the pre-holiday selloff, with the Nikkei posting a big rebound. That said, the risk factor behind it all — rising oil prices tied to Middle East tensions — hasn’t gone away, so I expect US stocks tonight to stay choppy. What I think matters more than reacting to short-term swings like this is sticking with steady, long-term investing. I’ll keep tracking the daily market moves and sharing what seems useful for building wealth over time.
For the previous market recap, see [Market Recap] Nikkei Plunges 2,694 Yen to 64,141 as AI Chip Stocks Tumble – Kioxia Halves in a Month, Tonight’s Focus: June Retail Sales [2026/7/17].
日本語版はこちら → https://hirokichiiii.com/デイトレ/jp-us-market-20260721/
* This article is for informational purposes only and is not investment advice. Please invest at your own responsibility.
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