Nikkei Average Hits Record Highs for Third Consecutive Month, Volatility Continues on AI Investment Concerns

The Nikkei Stock Average hit record highs for the third consecutive month in June, but volatile price movements persist due to concerns over excessive investment in AI infrastructure. Meanwhile, Kioxia surpassed Toyota in market capitalization to take the top spot, preparing for a stock split and a U.S. listing. The EU raised steel tariffs to 50%, applying them to Japan as well, and long-term interest rates are approaching 3%, with the market swayed by multiple factors.

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Nikkei Average Hits Record Highs for Third Consecutive Month, Volatile Moves on AI Investment Concerns In June 2026, the Nikkei Stock Average reached the 72,300 yen range, hitting record highs for the third consecutive month. Meanwhile, related stocks fell at times due to concerns over excessive investment in AI infrastructure, leading to continued volatile movements. 1 2

Kioxia Surpasses Toyota in Market Cap to Take Top Spot, Prepares for Stock Split and U.S. Listing Kioxia Holdings' stock price surged, pushing its market capitalization to approximately 45.5 trillion yen, surpassing Toyota Motor to become the top Japanese stock. In the year and a half since its listing, market capitalization has expanded more than 50-fold, and the company is considering a stock split and a U.S. listing. 3

EU Raises Steel Tariffs to 50%, Applies to Japan, WTO Lawsuit Considered The European Union raised the steel safeguard tariff rate to 50%, applying it to Japan, which had previously been duty-free under an economic partnership agreement. The Japanese government criticized this as a violation of the EPA, and the Japan Iron and Steel Federation called for considering a WTO lawsuit. 4

Long-Term Interest Rates Approaching 3%, Government Bond Selling Accelerates on Fiscal Concerns The yield on the new 10-year government bond temporarily reached 2.810%, a roughly 30-year high. With the phrase 'fiscal consolidation' removed from the basic policy framework, concerns over fiscal deterioration have intensified, bringing long-term interest rates into view of 3%. 5

BOJ June Tankan Shows Improved Business Sentiment but Warns of Price Rise Risks The June Tankan survey showed the business conditions index for large manufacturers at plus 22, improving for the fifth consecutive quarter. However, the one-year-ahead selling price outlook remains high at 3.7%, and the Bank of Japan is strengthening its vigilance against upside price risks. 6

Euro-Yen at Record Highs Around 184 Yen, 11 Trillion Yen Intervention Has Limited Effect The euro-yen reached around 184 yen, hitting record highs. The Japanese government conducted an estimated 11 trillion yen in yen-buying intervention from late April, but the yen's depreciation did not stop, leading authorities to shift tactics to 'unannounced covert intervention.' 7

Takashi Administration's 370 Trillion Yen Investment Plan Raises Concerns Over State-Led Risks Regarding the basic policy framework's plan to invest over 370 trillion yen in public and private funds across 17 fields including AI and space by fiscal 2040, the Mainichi Shimbun criticized it in an editorial as 'debt-ridden fiscal policy' and 'overly optimistic growth strategy.' 8