TOKYO - Tokyo stocks rebounded on September 4, with the Nikkei 225 closing at 65,020.94, up 806.46 points, or 1.26%, as buying returned to artificial intelligence and semiconductor-related shares after a Wall Street rally, while investors waited for U.S. jobs data and watched the yen, oil prices and Bank of Japan rate-hike expectations.
The broader TOPIX edged up 1.19 points, or 0.03%, to 4,103.23, showing that the day’s recovery was concentrated in the Nikkei’s high-priced technology and AI-related components rather than the wider market. Prime Market volume totaled about 2.21033 billion shares, with 788 stocks rising and 712 falling.
The Nikkei rose for the first time in five sessions after a four-day losing streak had pushed the index to a one-month closing low. The rebound was supported by stronger U.S. technology shares, easing global bond-market pressure and renewed buying in large-cap AI names.
The gain followed a mixed September 3 session in which the Nikkei fell for a fourth straight day despite a firmer TOPIX. On September 4, the pattern reversed: the Nikkei rose strongly while the broader market was almost flat, confirming that index-heavy technology stocks drove the move.
SoftBank Group was the clearest driver of the day’s rally. The stock surged after gains in Arm Holdings and OpenAI’s release of a new model improved sentiment toward SoftBank’s artificial intelligence investments. Because of SoftBank’s large Nikkei weighting, its rise had an outsized impact on the headline index.
SoftBank remains one of Tokyo’s most visible proxies for global AI investment sentiment through its exposure to OpenAI, Arm, robotics, digital infrastructure and other large-scale technology themes. Its movements can strongly influence the Nikkei even when the broader market is mixed.
Money Forward also rose sharply as investors continued buying software-related shares. U.S. software stocks rallied after Snowflake issued a bullish forecast, reinforcing the view that artificial intelligence may help software companies improve productivity, margins and customer demand rather than simply threaten existing business models.
That software rally supported Japanese names linked to cloud services, enterprise systems, cybersecurity, accounting software and corporate digital transformation. NEC, Fujitsu, Nomura Research Institute, Obic and other systems-related shares remained important reference points as investors looked beyond hardware-only AI beneficiaries.
Taiyo Yuden and Furukawa Electric were among the strongest Prime Market gainers, showing that investors still favor companies linked to electronic components, optical fiber, high-speed networks, cables and data-center infrastructure. These second-wave AI names benefit from the physical buildout required to support larger and more power-hungry data centers.
The semiconductor complex was firm overall, but the market remained selective. The rebound in AI and chip shares helped the Nikkei recover, yet investors continued to distinguish between companies with clear order visibility and those vulnerable to valuation pressure, speculative positioning or supply-chain uncertainty.
Advantest remained one of the key gauges of the market because of its large Nikkei weighting and exposure to advanced chip testing. Tokyo Electron, SCREEN Holdings, Kioxia Holdings, Ibiden, Lasertec, Murata Manufacturing and related names were also closely watched as investors assessed whether the AI correction had stabilized.
Kioxia remained a major barometer of memory-sector confidence. The company has become one of Tokyo’s clearest gauges of high-bandwidth memory, AI servers and data-center demand, but its shares have been highly volatile through August and early September.
Fujikura and Furukawa Electric continued to represent the second wave of the AI trade. Demand for optical fiber, power systems and communications infrastructure remains an important part of the data-center story, but these names have become sensitive to profit-taking after strong gains earlier in the year.
The Growth Market 250 Index also recovered, rising 20.73 points to 796.82. The gain followed recent weakness in smaller growth shares and suggested that risk appetite was improving as global yields eased and U.S. technology sentiment stabilized.
Still, the broader market’s muted TOPIX performance showed that the rebound was not fully broad-based. While AI, software and selected technology shares rose, some value and defensive names were weaker after strong recent gains.
The strongest Prime Market gainers included SoftBank Group, Money Forward, Suzuki, Takara Holdings, Meiko Electronics, W-Scope, Appier Group, Taiyo Yuden, Furukawa Electric and SEC. Their performance highlighted demand for AI-related technology, software, electronic components and selected earnings-backed names.
On the downside, JM Holdings led decliners after fiscal 2026 earnings came in below plan and profits fell. Sumitomo Chemical, Toyo Engineering, Nittetsu Mining, Future Innovation Group, Rohto Pharmaceutical, Mitsui & Co., Toho Zinc, Nissui and Iwatani also fell.
The fall in Mitsui & Co. stood out because trading houses had been among the strongest groups earlier in the week. Their weakness suggested profit-taking after recent gains, even though the sector remains supported by resource exposure, global cash flow and capital-efficiency reforms.
Energy and commodity-related names were mixed as oil prices stayed elevated. Higher crude supports resource companies but hurts the wider Japanese economy because Japan imports most of its energy. That makes oil a market risk even when some individual stocks benefit.
The global backdrop was more supportive than earlier in the week. Reuters reported that Asian shares rose ahead of U.S. payrolls after Federal Reserve Governor Christopher Waller said recent data showed signs of disinflation and that, if upcoming reports confirmed the trend, he would favor holding rates steady at the September policy meeting.
Waller’s comments cooled fears of an immediate Fed rate hike, helping bonds and equities recover. Futures reduced the probability of a September Fed move to about 50% from roughly 63% a day earlier, easing pressure on high-growth technology shares.
The remarks contrasted with the hawkish tone from Federal Reserve Chair Kevin Warsh at Jackson Hole, which had helped trigger the previous week’s selloff in technology stocks and a jump in global bond yields. Investors are now waiting to see whether U.S. data support Waller’s more cautious view or Warsh’s tougher inflation stance.
U.S. payrolls data due later on September 4 became the next major catalyst. Reuters said economists expected employers to add about 56,000 jobs in August after a shock decline of 23,000 in July, while the unemployment rate was expected to hold at 4.1%.
For Japan, the U.S. labor report matters because it will influence Federal Reserve expectations, U.S. Treasury yields, the dollar-yen exchange rate and global appetite for technology shares. A strong jobs report could revive rate-hike fears, support the dollar and pressure the yen. A weak report could ease U.S. yields and support risk assets, but may raise concern over the U.S. economy.
The yen remained in focus after a sharp weekly rally. Reuters reported that the dollar traded around 156.32 yen, with the yen set for its strongest weekly gain since late July, when Japan and the United States carried out a rare joint intervention to halt the currency’s slide.
The yen’s rebound was driven by a retreat in the dollar and growing expectations that the Bank of Japan could raise rates at its September 17-18 meeting. Markets now imply a 75% chance of a September BOJ move, while a hike by October is fully priced in.
The stronger yen helped reduce imported inflation pressure but also weighed on some exporters by reducing the yen value of overseas earnings. That tension remains central to Japanese equities because different sectors benefit from different currency outcomes.
Importers, retailers and household-facing companies benefit when the yen strengthens because it can reduce costs for food, raw materials, energy and imported products. Exporters, automakers, machinery makers and global manufacturers tend to benefit when the yen is weak.
Japan’s top currency diplomat, Atsushi Mimura, said on September 4 that authorities remained alert to currency moves and stayed in constant contact with U.S. officials after the G20 finance leaders’ meeting in Asheville, North Carolina. His comments reinforced the view that Tokyo still wants to prevent disorderly yen weakness.
The dollar briefly fell to 155.305 yen after Mimura’s comments before moving back toward the mid-156 range. The move showed that traders remain sensitive to official warnings, even though there was no evidence of fresh intervention.
Finance Minister Satsuki Katayama denied that U.S. Treasury Secretary Scott Bessent had made demands on Japan’s monetary policy. She said Bessent has long believed the yen is undervalued largely because of the interest-rate gap between Japan and the United States, but that the two did not discuss Japan’s monetary policy in their bilateral meeting.
The comments were important because some analysts had interpreted Bessent’s recent support for “decisive” monetary steps as pressure on the BOJ to raise rates. Katayama’s denial aimed to protect the central bank’s independence while keeping currency coordination with Washington intact.
The Bank of Japan is now facing a crucial September meeting. Governor Kazuo Ueda has said the BOJ will debate whether inflation risks are increasing and whether the economy remains on track with its baseline scenario. Board member Hajime Takata has also argued for nimble rate increases to prevent inflation from overshooting.
The BOJ kept its policy rate at 1% at its July 30-31 meeting, but Takata dissented in favor of raising it to 1.25%. Since then, the weak yen, high producer prices, firmer Tokyo inflation and rising global yields have strengthened expectations for another increase.
The stronger yen gives the BOJ some breathing room, but it does not remove the case for tightening. Markets continue to believe that inflation risks remain high enough for the central bank to raise rates soon, especially if wage growth and services prices stay firm.
Japanese government bond yields eased on September 4, helping support equities. The benchmark 10-year JGB yield fell to around 2.905%, extending a sharp retreat from the 3% level touched earlier in the week. The 30-year yield also declined, giving relief to investors after the recent bond selloff.
The easing in JGB yields reduced pressure on growth shares and improved risk appetite. Higher yields had been one of the main reasons AI and semiconductor stocks fell earlier in the week, as rising discount rates made high valuations harder to justify.
Even so, the bond market remains a major risk. The 10-year yield’s move to 3% earlier in the week was the highest since September 1996 and marked a major psychological shift for a country that spent decades in an ultra-low-rate environment.
Higher yields affect mortgages, corporate borrowing, bank balance sheets, equity valuations and government debt-servicing costs. They also make fiscal policy more difficult at a time when the government is preparing next year’s budget.
Reuters reported that budget requests from government agencies totaled 143.1 trillion yen for the next fiscal year, a pandemic-era scale that reflects Prime Minister Sanae Takaichi’s expansionary fiscal agenda and rising borrowing costs.
The requests include 12.2 trillion yen under a new investment program for strategic sectors such as artificial intelligence, semiconductors and economic security. That shows how the government is trying to use fiscal policy to raise Japan’s long-term growth potential.
The Finance Ministry also raised the assumed interest rate used in budget calculations to 3.8% from 3.0% in the fiscal 2026 budget, after the 10-year JGB yield hit 3%. Debt-servicing requests, including interest payments and debt redemption, reached a record 36.64 trillion yen, up 5.36 trillion yen from the current fiscal year.
Katayama said the government would carefully examine the requests and scrutinize spending and bond issuance in line with the goal of steadily lowering the debt-to-GDP ratio. Markets will watch whether new bond issuance can be kept near 40 trillion yen, as Takaichi has suggested.
The budget figures add a fiscal layer to the market’s interest-rate concerns. Investors want proof that higher spending will translate into stronger growth through reforms that address labor, land and energy shortages, rather than simply increasing debt.
Takaichi’s broader growth strategy calls for large-scale investment in semiconductors, AI, energy security, defense, shipbuilding, robotics, space and economic security. Those priorities support many of the sectors investors favor, but the bond market is increasingly demanding fiscal credibility.
For households, fiscal policy is also important because the government faces pressure to provide cost-of-living relief. Food, gasoline, electricity, transport and services remain expensive, and wage growth has not fully removed concern over real purchasing power.
The yen’s rebound may help slow imported inflation, but oil prices remain high. Reuters reported Brent crude near $95.52 a barrel, up about 7% for the week, as investors remained wary of inflation risks and saw few signs of progress in efforts to end the U.S.-Iran war and reopen the Strait of Hormuz.
For Japan, oil near $95 is a direct threat to households and businesses. The country imports most of its energy, so higher crude prices raise costs for gasoline, electricity, aviation fuel, logistics, chemicals and manufacturing.
The inflation impact is strongest when oil prices rise while the yen is weak. The yen’s move into the mid-156 range provides some relief, but energy costs remain high enough to keep pressure on corporate margins and consumer prices.
TV Tokyo’s broader business themes remain closely connected to this market. Companies are deciding how much of their higher labor, logistics, energy and materials costs can be passed on to customers, while households are judging the economy by whether wage increases can cover daily expenses.
Businesses with pricing power, strong brands, stable demand or exposure to structural investment remain better positioned. Firms without pricing power remain vulnerable if oil stays high, wages continue rising and consumers resist further price increases.
The market’s sector rotation continues to reflect those pressures. AI, software and selected technology shares can rally when global yields fall, while banks benefit from higher Japanese rates and importers benefit from a stronger yen. Resource shares benefit from oil, but most domestic businesses are hurt by higher energy costs.
The global market tone improved on September 4. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5%, Chinese blue-chip shares gained 4%, and South Korea’s Kospi increased 2%. Wall Street futures also firmed modestly ahead of the U.S. jobs report.
Software stocks were a major source of support in the United States after Snowflake surged 16.6% on a bullish forecast. That helped Japanese investors reassess software companies as possible AI beneficiaries, reinforcing buying in cloud, enterprise systems and digital-transformation names.
This matters because the AI theme is broadening beyond chips. While semiconductor equipment, memory and testing remain important, investors are increasingly looking for companies that can use AI to improve productivity, automate business processes and expand software margins.
At the same time, the AI trade remains volatile. Tokyo’s rebound on September 4 was encouraging, but the Nikkei remained down for the week after earlier losses. Investors are still cautious about whether high valuations can withstand elevated bond yields and uncertainty over U.S. and Japanese monetary policy.
What to watch next: whether the Nikkei can hold above 65,000 after its five-session rebound, whether TOPIX can regain momentum after a nearly flat close, and whether SoftBank Group, Money Forward, Taiyo Yuden, Furukawa Electric, Advantest, Tokyo Electron and Kioxia can continue attracting buying.
The U.S. jobs report is the immediate overseas event. A softer number could support Waller’s view that the Fed can hold rates steady, easing pressure on global yields and technology shares. A stronger number could revive rate-hike fears and renew pressure on the yen and Japanese growth stocks.
The yen around 156 to the dollar remains a key domestic signal. Further strength would ease imported inflation and support importers, while renewed weakness toward 160 would revive intervention speculation and increase pressure on the BOJ.
The 10-year JGB yield near 2.9% will remain another critical marker. A sustained retreat would support equity valuations, while a move back toward or above 3% would renew pressure on growth stocks, fiscal policy and government debt-servicing costs.
Other key factors will be Brent crude near $95, developments around Iran and the Strait of Hormuz, U.S. producer and consumer price data next week, BOJ communication before the September 17-18 meeting and the government’s fiscal 2027 budget process.
September 4 showed that Tokyo can still rebound sharply when Wall Street technology shares rise and bond yields ease, but the narrow gap between a strong Nikkei and a flat TOPIX shows that the market remains highly dependent on AI-linked heavyweights and vulnerable to shifts in currencies, oil and central-bank expectations.
Source: CNBC
