Hey everyone, Hirokichi here.
The Nikkei 225 closed up 890.37 points (1.36%) at 66,216.79 on August 20, snapping its two-day losing streak. Falling US long-term yields gave the market a real lift, clawing back a good chunk of the previous slide. Tonight all eyes are on the minutes from the July FOMC (Federal Open Market Committee) meeting, so I think tonight’s US session is worth watching closely.
(1) Nikkei Rebounds 890 Points, TOPIX Also Climbs
On August 20, the Nikkei 225 closed at 66,216.79, up 890.37 points (1.36%) from the previous day. Over the two prior sessions the index had dropped roughly 3,900 points, so buyers stepped in on the view that stocks had simply become oversold (source: Nikkei). The TOPIX also rebounded, closing up 47.42 points at 4,059.73 (source: Kyodo News).
(2) Falling US Long-Term Yields Drove the Rebound
The rebound was driven by the US Treasury’s announcement that it would expand the size of its long-term bond buyback program. That pushed US long-term yields lower, and on the previous day (August 19) the Dow Jones Industrial Average rose 119.65 points to 53,463.05 while the Nasdaq Composite gained 41.38 points to 26,331.09. That positive momentum carried over into Japanese stocks (source: Kabutan).
A quick note: a “buyback” is when a government or company repurchases bonds or shares it has already issued. When the government buys back more of its own bonds, there’s less supply in the market, which tends to push yields down.
(3) Sectors and Stocks in the Spotlight
By sector, transportation equipment, electric power and gas, and pharmaceuticals led the gainers, while steel, banks, and insurance lagged. Among individual stocks:
- SoftBank Group alone added about 159 points to the Nikkei, the single biggest positive contributor
- Fast Retailing was the second-biggest contributor
- Kioxia Holdings, Recruit Holdings, and Terumo also traded firmly
- On the downside, chip-equipment names like Tokyo Electron, Ibiden, and Advantest saw profit-taking, capping the index’s gains
Semiconductor-related stocks have been leading the market’s recent rally, so I think it makes sense that we’re seeing some profit-taking after such a strong run (source: Kabutan).
(4) USD/JPY Holds Firm Above 158
In the currency market, USD/JPY traded at 158.63 as of 3pm Tokyo time, reversing higher (yen weaker) after the previous day’s sharp yen rally. Falling US yields would normally weigh on the dollar, but this looks like a bounce-back from the prior day’s steep move (source: Minkabu FX).
(5) Tonight’s US Market Outlook
Tonight in New York, the minutes from the July 28-29 FOMC meeting are due out, and they’ll likely be the biggest market mover. At that meeting the Fed held rates steady, but three participants reportedly favored a hike, so the key question is how widespread that hawkish view was inside the Fed. A hawkish-sounding set of minutes could weigh on stocks.
It’s also a busy stretch for retail earnings, with Target, Lowe’s, and TJX Companies among the major names reporting, giving investors a read on how inflation and high interest rates are affecting consumer spending (source: Gaitame.com).
(6) Summary
Today, falling US rates gave both the Nikkei and TOPIX their first rebound in three days. That said, stocks haven’t fully recovered the recent slide, and chip-related names are already seeing some profit-taking. What comes out of tonight’s FOMC minutes and US retail earnings could well set the tone for Japanese stocks tomorrow, so I’ll be keeping a close eye on both.
You can find the previous market recap here: [Market Recap] Nikkei Climbs 484 Points to 69,198, Up for a Fifth Straight Day as Chip Stocks Lead – Tonight’s Focus: US Housing Data Ahead of FOMC Minutes [2026/8/17]
日本語版はこちら → 日経平均890円高の66,216円で3日ぶり反発!米長期金利低下が追い風、今夜はFOMC議事要旨に注目【2026/8/20】
* This article is for informational purposes only and is not investment advice. Please invest at your own responsibility.
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