Yen's slide continues; U.S.-Japan coordinated intervention has limited effect, trading around 159 yen

Yen weakness persists despite U.S.-Japan coordinated intervention, hovering in 159 yen range, becoming a concern for global finance The coordinated intervention by U.S. Treasury Secretary Bessent and Japanese authorities—the first in about 30 years—briefly pushed the yen to 157, but it has since fallen back to the 159 yen range. JPMorgan maintains its dollar/yen forecast of 164 yen despite the market pricing in a Bank of Japan rate hike, and warns that an unwinding of yen carry trades could be the keystone of a 'giant Jenga tower' for global finance. 1234

Nikkei rises for 4th straight day, TOPIX hits record high with 8-day winning streak, led by semiconductor stocks Last week in the Tokyo market, buying in semiconductor and AI-related stocks lifted the Nikkei average for a fourth consecutive session, while the TOPIX extended its winning streak to eight sessions and set a record high for a third straight day. The Nikkei rose about 5% on the week, recovering to the 68,800 level, with the 70,000 mark coming into view. 56

April-June GDP due on 17th, expected around 2% annualized growth, a test for BOJ rate-hike expectations The April-June GDP released on the morning of August 17 is expected by the market to accelerate to 2.0–2.3% annualized from the previous quarter's 1.8%. The outcome could sway expectations for additional Bank of Japan rate hikes and the yen's exchange rate, while July CPI, trade statistics, and the U.S. FOMC minutes are also due this week. 578

Cabinet approves cutting consumption tax on food to 1%; concerns over first-ever tax cut The government decided at a cabinet meeting to cut the consumption tax on food from 10% to 1% starting next April, and to provide benefits to low- and middle-income earners for the remaining 1%, effectively making it zero. It is the first tax cut since the consumption tax was introduced, but concerns have been raised that retail prices may not fall, that wealthier households benefit more, and that fiscal deterioration could accelerate yen depreciation. 9

Wage hikes implemented at 83.2% of firms; July bankruptcies exceed 1,000 for second straight month According to a survey by Tokyo Shoko Research, 83.2% of companies implemented wage hikes in fiscal 2026, with increases of 5% or more spreading even among small and medium-sized enterprises. Meanwhile, Teikoku Databank reported that corporate bankruptcies in July totaled 1,037, exceeding 1,000 for a second consecutive month, with bankruptcies caused by high prices reaching a record 121. 10

Nexon shares hit daily limit high on special dividend of 415 yen per share; annual dividend about 10 times higher Nexon announced a special dividend of 415 yen per share, bringing this year's dividend per share to 475 yen, an increase of about 956% from 45 yen the previous year. On the following trading day, the 14th, the stock surged to the daily limit of 3,022 yen, and reached 3,580 yen in after-hours trading. 11

Bandai Namco raises second-quarter outlook; IP strategy drives earnings Bandai Namco Holdings has revised up its consolidated earnings forecast for the second quarter, expecting net sales of 690 billion yen and operating profit of 124 billion yen. Its IP-centric strategy, including Gundam, is capturing global demand in the toys and hobby business, driving performance. 12

South Korean investors concentrate buying in Japanese semiconductor stocks; Murata Manufacturing tops list Since the start of August, South Korean domestic investors have been concentrating their buying on semiconductor-related Japanese stocks, with Murata Manufacturing ranking first in net purchases and Tokyo Electron second. Following the rebound in semiconductor stocks, buying has spread across the entire supply chain, including materials, components, and testing equipment. 13