[Weekly Recap] Aug 31 – Sep 4, 2026: Nikkei 225 Falls 1,290 Points on Global Rate Spike, Rebounds 806 Points Friday

Hey everyone, Hirokichi here.

This time I’m looking back at the whole week of Tokyo trading from Monday, August 31 to Friday, September 4, 2026. The Nikkei 225 fell for four straight sessions from Monday through Thursday, then staged a big 806-point rebound on Friday. Over the full week, the index lost 1,290 points, down 1.95%. Let’s walk through what happened and why the market swung so hard.

Nikkei 225 down 1,290 points for the week — four straight losses, then a 806-point Friday rebound

First, here’s the day-by-day close for the week.

Looking at this table, Monday and Tuesday were mild declines, then Wednesday saw a drop of 1,889 points — one of the sharpest single-day falls of the year. Thursday was another small decline, and Friday clawed back nearly half of that lost ground in a single session.

It wasn’t just the Nikkei. TOPIX (the broader Tokyo Stock Price Index) and the Tokyo Stock Exchange Growth Market 250 Index also swung around a lot as the week went on. TOPIX was up a solid +0.62% on Tuesday, then dropped even faster than the Nikkei at -2.40% on Wednesday, before rising +0.75% on Thursday and finishing nearly flat at +0.03% on Friday. The yen also moved sharply: it started the week in the high-159 range against the dollar, then strengthened after hawkish comments from a Bank of Japan board member on Wednesday, ending the week around 156 on Friday. Watching the currency alongside the indexes really helps you understand what kind of week this was.

Why did it move? Global rate hikes and an AI/semiconductor stock slide drove the week

Three big threads ran through this week’s moves.

(1) Rising U.S. long-term rates hit AI and semiconductor stocks
Early in the week, the U.S. 10-year Treasury yield rose to around 4.80% (its highest in about a year and eight months). When rates rise, stocks that are priced on future earnings — especially high-growth tech and semiconductor names — start to look “expensive” by comparison. Heavyweight names like SoftBank Group, Advantest, and Tokyo Electron (stocks with high per-share prices that carry outsized weight in the price-weighted Nikkei index) were sold off, weighing on the whole index. Japan’s own 10-year government bond yield also climbed to 2.990%, its highest in roughly 30 years, adding to the pressure.

(2) An Iranian airstrike pushed oil — and rates — even higher
On September 2, it emerged that U.S. Central Command had carried out an airstrike on an Iranian Revolutionary Guard Corps base. Crude oil futures (WTI) jumped 5.20% to $90.22 a barrel. Worries about inflation from higher oil prices pushed U.S. long-term rates up further, and on that single day the Nikkei fell 1,889 points while TOPIX dropped 2.40%, with more than 90% of TSE Prime-listed stocks in the red — a genuinely across-the-board selloff.

(3) Hawkish BOJ comments triggered a rapid yen rally
Also on September 2, Bank of Japan board member Hajime Takata said in a speech in Sapporo that the central bank would “respond flexibly, rather than sticking to a fixed pace” — comments the market read as hawkish, opening the door to consecutive rate hikes. The dollar-yen rate went from around 160 early in the week to the mid-156 range within just a few days. A stronger yen is a headwind for exporters, but higher rates are good news for banks (wider lending margins), so a name like Mitsubishi UFJ Financial Group held up relatively well even as automakers and electronics exporters lagged.

Then, heading into the weekend, Fed Governor Christopher Waller made comments that softened his hawkish stance, which pulled U.S. long-term rates back down. Tech and semiconductor names bounced back on the news, and on Friday a rally in SoftBank Group’s subsidiary Arm added extra fuel, helping the Nikkei jump 806 points for its first big rebound in five sessions.

Stocks that made headlines this week, and why

Beyond the index-level moves, here’s a look at the individual names that stood out.

SoftBank Group (9984): the week’s most dramatic swing

Early in the week, SoftBank Group fell as much as -4.87% on September 2 amid rate-driven caution toward “expensive” growth names. By Friday, September 4, it had reversed hard to close up 11.8% at JPY 5,590, on a rally in shares of its subsidiary Arm. The Nikkei 225 is a price-weighted index, so a handful of high-priced stocks can move it disproportionately — and SoftBank is the poster child for that. On Friday, this single stock accounted for a large chunk of the index’s gain.

Advantest (6857): first in line for profit-taking as rates rose

The world’s largest maker of semiconductor test equipment fell 6.3% to JPY 33,050 on September 2. After a big run-up this year on booming AI chip demand, it was a natural target for profit-taking once rates started climbing.

Mitsubishi Corp (8058): one comment from Berkshire Hathaway lifted the whole trading-house sector

On September 3, it was reported that Berkshire Hathaway CEO Greg Abel told the Nikkei newspaper that Berkshire intends to keep holding its stakes in Japan’s five major trading houses — Itochu, Marubeni, Mitsui & Co., Mitsubishi Corp, and Sumitomo Corp — for the long term. Mitsubishi Corp jumped 4.92% to JPY 5,099 on the news. It’s striking that a comment from a famous investor, without any fresh earnings or dividend news behind it, was enough to move the entire trading-house sector in one day.

Tokyo Electric Power Holdings (9501): a broad rally across power utility stocks

On September 1, buying poured into power utility stocks across the board, and Tokyo Electric Power Holdings rose 6.36% to JPY 572.3. Behind the move were expectations for growing electricity demand from data centers as generative AI spreads, along with speculation about restarting or expanding the use of nuclear plants. Kyushu Electric Power (+8.16%) and Kansai Electric Power (+5.14%) also rose broadly, in a sector-wide move.

Tier IV (593A): a small-cap that surged and then crashed within days

Tier IV, which develops the autonomous-driving software “Autoware,” rode a report that Toyota plans to roll out near-hands-off driver assistance technology known as “Level 2++” by 2028. The stock hit its daily limit-up repeatedly starting around August 28, climbing another 19.7% on September 3. But on September 4 it reversed sharply, hitting limit-down at -19.6%. It’s a vivid reminder that lightly-traded small-cap names that multiply in price over a short span tend to swing just as hard on the way down.

How I’d think about this as an individual investor

If you’re steadily dollar-cost averaging into index funds, I honestly don’t think a wild week like this one is worth losing sleep over. If anything, a dip like Wednesday or Thursday just means you’re buying more shares for the same amount of money. If you’re trading individual stocks short-term, though, this week was a useful lesson: when rates move, the market’s favorite themes rotate. Expensive growth stocks tend to get sold when rates rise, while money tends to flow toward banks and real-asset-related names — and that pattern is likely to repeat. Either way, I think the important thing is to come back to your own investment plan rather than reacting to headlines in the moment.

What to watch next week

Here are three things worth keeping an eye on going forward.

(1) The BOJ’s policy meeting on September 17-18
Will the rate-hike expectations that triggered this week’s sharp yen move actually turn into a real decision? Comments from BOJ officials in the run-up to the meeting are worth watching closely.

(2) How the Fed’s rate-cut outlook shifts after the U.S. August jobs report
The August jobs report released on September 4 will shape whether expectations for Fed rate cuts strengthen or fade, which should also affect Tokyo trading early next week.

(3) Whether buying in AI/semiconductor and autonomous-driving names continues
It’s worth watching whether the money flowing into high-priced names like SoftBank Group and Advantest, and small-caps like Tier IV, was a one-off or the start of a more lasting theme.

Let’s keep at it, slow and steady. See you next week!

For more detail on any single day this week, check out the daily recaps: Sept 1 Nikkei Recap, Sept 2 Nikkei Recap (Iran airstrike and the semiconductor slide), Sept 3 Nikkei Recap (BOJ’s hawkish turn and the yen’s surge), and Sept 4 Nikkei Recap (SoftBank-led rebound).

(Prices and index figures in this article are based on reporting and data from Nikkei, Kyodo News, Bloomberg, Kabutan, Matsui Securities market information, and similar sources.)

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* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

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