[August 2, 2026 Morning Edition] Summary of Key News Moving the Stock Market
📰 This Morning's Headlines
Bank of Japan keeps policy rate at 1.0%; Governor Ueda wary of upside inflation risks
Dollar-yen plunges from 40-year high; speculation of government/BOJ currency intervention emerges
Nikkei Stock Average rebounds sharply, briefly recovering the 65,000 yen level; buying in AI and semiconductor stocks
US Tech Earnings: Amazon stock surges 14%, Apple falls 7.4% as fortunes diverge
Federal Reserve keeps policy rate unchanged for 5th consecutive meeting; Chair Warsh maintains tightening stance
1. Bank of Japan keeps policy rate at 1.0%; Governor Ueda wary of upside inflation risks
What happened?
At the Monetary Policy Meeting on July 31, the Bank of Japan decided to keep the policy interest rate at the current 1.0% with an 8-to-1 vote by the nine policy board members. Having just decided to raise the rate to 1.0% (the highest level in 31 years since 1995) at the June meeting, the bank aims to assess the impact. In his press conference, Governor Kazuo Ueda stated that he is "more conscious than ever" of upside inflation risks due to factors such as rising crude oil prices, signaling a stance of continued rate hikes.
What is the impact on the market?
The rate hold was in line with prior expectations, so there were no surprises. However, Governor Ueda's hawkish remarks (a stance positive toward monetary tightening) leave room for speculation about future rate hikes. This is a tailwind for bank stocks due to expectations of rising interest rates, while it tends to be somewhat burdensome for real estate and high-dividend stocks, which are sensitive to rising rates.
Source: Nihon Keizai Shimbun, Yahoo! News (July 31, 2026)
2. Dollar-yen plunges from 40-year high; speculation of government/BOJ currency intervention emerges
What happened?
This week, the dollar-yen exchange rate plunged nearly 6 yen from a 40-year high of 163.94 yen to the 157 yen level at one point. After rising to 160.53 yen in the New York market on July 31, the yen strengthened following reports that the US Treasury Department had notified banks of the possibility of intervention in the yen exchange rate, and that the Federal Reserve Bank of New York had conducted a rate check on euro-yen with major banks, causing the pair to fall to around 158.17 yen.
What is the impact on the market?
A rapid appreciation of the yen is likely to lead to concerns about deteriorating profitability for export-related stocks (automobiles, machinery, etc.) and could become a drag on the Nikkei Average as a whole. On the other hand, it is likely to have a positive effect on domestic demand-related sectors (retail, food, etc.) where import costs will decrease. Whether intervention actually took place awaits future official announcements, and caution is required regarding volatility (rough price movements) from next week onward.
Source: Zaikei Shimbun, Diamond ZAi (August 1, 2026)
3. Nikkei Stock Average rebounds sharply, briefly recovering the 65,000 yen level; buying in AI and semiconductor stocks
What happened?
The Nikkei Stock Average closed at 64,362.02 yen on July 31, up 2,494.59 yen (+4.03%) from the previous day, marking its second consecutive day of gains. Following the rise in US tech stocks the previous day, the Philadelphia Semiconductor Index (SOX) rose 8.19%, which spilled over into the Tokyo market, leading to heavy buying of semiconductor-related stocks such as Tokyo Electron and Advantest. Tokyo Electron also upwardly revised its earnings forecast for the first half of the fiscal year ending March 2027 and announced share buybacks and a stock split.
What is the impact on the market?
The trend of semiconductor and AI-related stocks pushing up the entire index continues, and the performance of high-priced stocks (stocks with high price levels that have a large impact on the index) such as Tokyo Electron and Advantest is likely to dictate the direction of the Nikkei Average for the time being. Depending on the earnings results of US tech stocks and currency movements, price volatility may increase.
Source: Nihon Keizai Shimbun, Kabutan News (July 31, 2026)
4. US Tech Earnings: Amazon stock surges 14%, Apple falls 7.4% as fortunes diverge
What happened?
Earnings for the April-June 2026 quarter for the five major US IT companies were released on July 30, with all five companies reporting revenue growth driven by AI demand. Amazon's revenue rose 20% year-on-year to $200.6 billion, and its cloud business, AWS, grew 37% to $42.2 billion, exceeding market expectations, causing its stock price to surge about 14%. Meanwhile, although Apple performed well with a 16% increase in revenue and a 27% increase in net income, its stock price fell 7.4% at the close due to supply constraints and cautious future revenue guidance. Microsoft also performed well, with revenue up 18% and net income up 31%.
What is the impact on the market?
With the momentum of AI-related investments confirmed to remain strong, a tailwind for Japanese semiconductor and AI-related stocks (such as Tokyo Electron and Advantest) is expected to be felt. On the other hand, there are cases like Apple where stocks are sold off due to future concerns despite strong earnings, so there is a possibility that the selection of individual companies based on demand trends and outlooks will intensify.
Source: Forbes JAPAN, Akita Sakigake Shimpo (July 31 and August 1, 2026)
5. FRB keeps policy interest rate unchanged for 5 consecutive meetings; Chair Warsh maintains tightening stance
What happened?
At the FOMC (Federal Open Market Committee) meeting held on July 29, the FRB (Federal Reserve Board) decided by a 9-to-3 majority vote to keep the policy interest rate (FF rate target range) unchanged at 3.50-3.75%. Three members voted against the decision, advocating for a rate hike. While Chair Kevin Warsh indicated an intention to "assess the trend" of the impact of the Middle East situation and other factors on prices, he also showed a stance of "acting without hesitation" to implement additional tightening if necessary.
What is the impact on the market?
While the interest rate hold was as expected, the presence of dissenting votes and Chair Warsh's hawkish remarks are likely to leave the market with the awareness that "the possibility of a rate hike has not completely disappeared." For growth stocks and real estate-related stocks that are sensitive to interest rate trends, nervous price movements may continue leading up to the next meeting in mid-September.
Source: Nihon Keizai Shimbun (July 30, 2026)
🔭 Today's Key Points
Truth of currency intervention and future dollar-yen trends: The focus is on whether the actual presence of intervention by the government and the Bank of Japan will be clarified in official statistics in the future. If intervention is confirmed, it could lead to further upward pressure on the yen.
FRB remarks leading up to the next FOMC (mid-September): There are reports that Chair Warsh is considering reviewing the number of FOMC meetings, so attention is also on changes to the style of monetary policy management itself.
Domestic corporate earnings season continues: Following Tokyo Electron, the earnings results of other semiconductor and high-tech related companies are likely to influence sector selection for the Nikkei Stock Average.
⚠️ Caution
This article is for informational purposes only and does not recommend any specific stocks or transactions. Please invest at your own risk.
