Hey everyone, Hirokichi here.
Today is Tokyo’s first trading day back after the “Mountain Day” holiday. On the last session (August 10), the Nikkei 225 jumped sharply and the TOPIX (Tokyo Stock Price Index, a broad gauge of the Tokyo Stock Exchange) moved within reach of a record high. Tonight, the biggest event for markets is the release of July’s US CPI (Consumer Price Index, a measure of how much prices for goods and services have changed).
(1) Japan’s Last Session (8/10): Nikkei Rebounds Sharply to 66,970
On Monday, August 10, the Nikkei 225 closed at 66,970.22, up 1,363.51 points (+2.08%) from the prior session, snapping a two-day pullback (Source: Kabutan). The TOPIX also rose 25.68 points (+0.63%) to 4,100.61, its fifth straight gain, moving close to the closing high set on July 6 (Source: Nikkei). About 59% of stocks advanced versus 39% that declined, with Prime Market turnover of roughly 9.19 trillion yen. Tuesday, August 11 was a market holiday (Mountain Day) in Japan.
(2) What Moved the Market: AI and Semiconductor Stocks Led the Way
The rally traces back to Friday’s US jobs report, where hiring came in weaker than expected. That fueled hopes that the Federal Reserve (the US central bank) would hold off on a rate hike (raising the policy interest rate, which tends to weigh on stock prices), pulling down long-term US yields and lifting rate-sensitive tech names. That momentum carried into Tokyo, where AI and semiconductor-related stocks led the gains (Source: Zaikei, Nikkei).
What caught my eye is how quickly Tokyo followed Wall Street’s lead here. Semiconductor names swing hard in both directions on this kind of “yields down, tech up” story, so I think it’s worth enjoying the rally without chasing it too aggressively.
(3) Yen: USD/JPY Holding Steady Above 159
As of 6 a.m. Japan time on August 12, the dollar was trading around 159.28 yen (Source: Kyodo News). The pair held in the 159 range through Tuesday’s Tokyo session as well, showing little sign of the yen strengthening off its weaker levels.
(4) Tonight’s US Market Outlook: All Eyes on July’s CPI
US stocks fell for a second straight session on August 11. The Dow closed at 53,791.85, down 184.13 points (-0.34%); the Nasdaq Composite fell 159.91 points (-0.60%) to 26,445.45; and the S&P 500 dropped 24.91 points (-0.32%) to 7,728.20 (Source: Reuters). Renewed skepticism about a deal to reopen the Strait of Hormuz pushed oil prices higher and weighed on sentiment. Amazon fell 2.1% and Alphabet dropped 3.8%, dragging on the indexes, while energy shares and the Philadelphia Semiconductor Index held up better.
Tonight (Japan time), the main event is the release of July’s US CPI. Economists’ median forecast calls for a 0.1% monthly rise (after June’s 0.4% decline), with core CPI (which excludes volatile food and energy prices) expected to rise 0.2% month-over-month and 2.5% year-over-year — the smallest annual gain since February (Source: Bloomberg). A hotter-than-expected print could revive rate-hike worries and pressure stocks, while a softer number would likely support the case for the Fed to stay on hold. Views remain split on whether the FOMC (Federal Open Market Committee, the Fed’s policy-setting group) will raise rates in September.
For what it’s worth, Nikkei futures in Chicago (September contract, yen-denominated) were quoted at 67,065, about 95 points above Osaka’s day-session close, hinting at a firm open for Tokyo today (Source: Reuters).
(5) Bottom Line: Watch How Markets React to Tonight’s CPI
The Nikkei rallied hard last session and the TOPIX moved within reach of a record, powered by fading rate-hike fears and tech buying. Whether that continues largely depends on tonight’s CPI print. I think a number that meets or comes in below expectations would be a tailwind for stocks. That said, the yen is still sitting in the weaker 159 range, so I’ll be watching for any sudden swings.
You can also check out the previous recap from August 6: [Market Recap] Nikkei Drops 617 Yen to 65,683, Snapping a Three-Day Win Streak – Chip Stocks Hit by Profit-Taking, Tonight’s Focus: US Jobless Claims [2026/8/6]
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* This article is for informational purposes only and is not investment advice. Please invest at your own responsibility.
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