Nikkei Average Closes at Record High of 72,366 Yen, Up 3,191 Yen

On the 25th, the Tokyo market saw the Nikkei Average hit a record high of 72,366 yen, up 3,191 yen. Strong earnings from US Micron boosted semiconductor stocks. BOJ board member Tamura argued for raising interest rates once every few months toward a neutral rate of 2%. BofA raised its year-end Nikkei target to 76,000 yen, and the yen remained in the upper 161 yen range with intervention vigilance continuing.

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Nikkei Average Closes at Record High of 72,366 Yen, Up 3,191 Yen On the 25th, the Nikkei Average closed at 72,366 yen, up 3,191 yen from the previous day. Following strong earnings from US Micron, semiconductor and AI-related stocks were bought back, updating the closing record high for the first time in three days. The gain was the fourth largest on record. 1

BOJ's Tamura States Neutral Rate Around 2%, Basic Line of Raising Rates by 0.25% Once Every Few Months Board member Naoki Tamura said in a speech on the 25th that given upside risks to prices, it is necessary to raise the policy rate to around the neutral rate of 2%. He indicated that the basic pace of rate hikes would be 0.25% once every few months, but if risks increase, he would not hesitate to accelerate. 2 3 4

BofA Raises Year-End Nikkei Target to 76,000 Yen on AI Demand and ROE Improvement BofA Global Research raised its year-end Nikkei target from 67,000 yen to 76,000 yen, and its TOPIX target from 4,200 to 4,400. Reasons include strong AI-related demand, a retreat in Hormuz Strait risks, and improved corporate ROE. The firm analyzes that expanding leverage will become the next ROE driver. 5

MUFG: Yen Weakness Slows on Intervention Vigilance but Trend Unchanged; Coordinated Intervention with US Observed Mitsubishi UFJ Bank noted that intervention vigilance is slowing the pace of yen depreciation, but the dollar-yen trend remains unchanged despite BOJ rate hikes. Following an agreement between Finance Minister Katayama and US Treasury Secretary Bessent on 'bold measures,' the possibility of coordinated intervention with the US has emerged. 6

Government's Basic Policy Draft to State Monetary Policy Supporting Private Demand as 'Very Important' In the draft of the basic policy to be compiled in July, the government is likely to express the view that appropriate monetary policy operations supporting private demand are 'very important.' Based on Article 4 of the Bank of Japan Act and the 2013 joint statement, it calls for close coordination with the BOJ. This will be the first basic policy under the Takaichi administration. 7

Toyota Group's KINTO Doubles Operating Profit; Shift from Car Sales to Subscriptions Accelerates Toyota Motor Corporation's subscription service 'KINTO' doubled its operating profit. The shift from car ownership to usage is progressing, and the non-sales-oriented model is expanding profits. 8