Nikkei Average Recovers to 70,000 Yen Level with 737.12 Yen Gain, Yet Reasons for Burden of Interest Rates and Weak Yen Remain

The Nikkei Average ended trading on October 6 at 70,683.98 yen, recovering to the 70,000 yen level. The rise in U.S. high-tech stocks has spread to the Japanese market, with the technology sector leading the index’s gains.

However, a rise in stock prices is not the same as a reduction in the burden on households. U.S. long-term interest rates are at 5.31%, and the dollar-yen rate in Tokyo is in the 158 yen range. Although crude oil has fallen, concerns about transportation and supply persist. This article separates market movements from the paths to import prices and borrowing costs, and organizes them until the next U.S. inflation indicators are confirmed.

Tokyo stock prices are as of the October 6 closing, exchange rates and domestic interest rates are as of 15:40 on the same day, and U.S. interest rates and crude oil use information from October 5. The price fluctuation rates of individual stocks are values at the time of the AP report.

Today’s Key Points

• The Nikkei Average rose 737.12 yen from the previous day, a 1.05% increase to 70,683.98 yen. 165 of the constituent stocks rose

• The U.S. 10-year Treasury yield on October 5 was 5.31%. The market’s pricing of an October Fed rate hike according to Reuters is about 24%

• The dollar-yen rate at 15:40 on October 6 was 158.07 yen, and the new 10-year Japanese government bond yield was 3.105%

• Brent crude oil futures on October 5 fell 1.89% to $100.32. The G7 agreed to release 100 million barrels from reserves

• While NVIDIA’s record high supports Japanese high-tech stocks, there is a divergence in the price movements of AI-related stocks

• The U.S. September CPI is scheduled to be announced at 21:30 JST on October 14, and the PPI at 21:30 on October 15

1. Technology stocks that supported the Nikkei Average’s recovery to the 70,000 yen level, and the breadth of the rise

The Nikkei Average on October 6 ended at 70,683.98 yen, up 737.12 yen from the previous day. According to official Nikkei tallies, 165 stocks rose and 55 fell, with the technology sector contributing 556.85 yen to the index.

Buying of high-tech stocks following NVIDIA’s record high has spread to the Japanese market. However, the contribution to the index is also influenced by the composition ratio of the stocks.

We should not judge the improvement of the overall economy solely by the 70,000 yen milestone, but rather check the breadth of rising stocks and their relationship with corporate earnings. [Nikkei Official Tally](https://indexes.nikkei.co.jp/nkave/archives/summary?

dt=20261006&idx=nk225)

2. Even if rate hike expectations recede, U.S. long-term interest rates do not necessarily fall

According to market information reported by Reuters on October 5, the U.S. 10-year Treasury yield rose to 5.31%. Meanwhile, the pricing of an October rate hike based on the CME FedWatch tool has fallen to about 24% from 64% a week ago.

Even if the view on the next meeting changes due to weak employment statistics, long-term interest rates also reflect concerns about government bond supply and demand, fiscal policy, and inflation. This is an important distinction when looking at Japanese companies’ overseas financing and exchange rates.

I want to track policy rate expectations without confusing them with actual market interest rates. Reuters: https://www.marketscreener.com/news/nasdaq-hits-record-as-dollar-and-treasury-yields-climb-oil-prices-ease-ce785dd8db8efe27

3. The 158 yen exchange rate and domestic interest rates reach daily life through separate channels

According to market information as of 3:40 PM on October 6, the dollar-yen was at 158.07 yen, and the yield on the newly issued 10-year Japanese government bond was 3.105%. As for the channels affecting daily life, while a weak yen works to push up the yen-denominated costs of imports and fuel, long-term interest rates may influence the interest rate settings for fixed-rate mortgages and similar products.

However, there is a time lag in passing on import prices, and borrowing conditions also differ depending on the financial institution and the contract. It is not possible to judge variable-rate mortgages solely based on long-term interest rates.

I want to check market figures separately from the prices and conditions actually announced by companies and financial institutions. Market information: https://www.oanda.jp/lab-education/market_news/mn_1037509_202610061540/

4. Crude oil falls to $100.32; concerns about transportation remain despite reserve releases

Brent crude oil futures fell 1.89% on October 5, closing at $100.32. The recovery of exports from the Middle East and the G7 agreement to release 100 million barrels from reserves served as supply-side factors.

On the other hand, concerns about attacks on ships and energy facilities continue, so it cannot be said that supply anxiety has been resolved just by the price drop. For Japanese households, the ripple effect on gasoline and logistics costs is the point of contact.

However, because there is a time lag regarding exchange rates, inventory, and price reflection, I do not assume that retail prices will immediately drop by the amount that crude oil has fallen, and I want to check supply volumes and actual sales prices. Reuters: https://uk.marketscreener.com/news/oil-slips-as-middle-east-crude-exports-rise-g7-to-release-stocks-ce785ddbdf8bf724

5. Do not group AI-related stocks together; look at the profit structure of each company

While NVIDIA’s record high supports domestic high-tech stocks, the price movements of AI-related stocks are not uniform. As of the AP report on October 6, Advantest was up 3.9%, while SoftBank Group was down 3.1%.

These are not treated as closing prices for individual stocks. For semiconductor inspection equipment manufacturers and investment companies, the channels through which demand and investment evaluations reach profits are different.

I want to check the disclosures of each company rather than judging the direction of business performance based solely on the theme name. AP: https://apnews.com/article/e8285ec7afbe81e9df277e8ee2127982。

NVIDIA’s earnings comparison and the ripple effect on Japanese stocks are organized in the already published earnings deep-dive No. 0, free sample: https://note.com/den_youtube/n/n6519c7a712c8.

6. Future points of attention are US price indicators and changes in the burden accompanying high stock prices

The next material to check is US price indicators. According to the BLS schedule, the September CPI will be announced at 9:30 PM JST on October 14, and the PPI will be announced at 9:30 PM on the 15th.

The FOMC is scheduled for October 27-28, US time. Rather than predicting the market based solely on whether the numbers are good or bad, I want to check the breakdown of prices and the reactions of interest rates and exchange rates.

In Japan, we will separately track whether the rise in stock prices is accompanied by a spread in corporate earnings, and how the burden of import costs and borrowing conditions changes. This article is for informational purposes and economic commentary, and is not individual investment advice.

BLS release schedule: https://www.bls.gov/schedule/2026/10_sched.htm, FRB meeting schedule: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Check via video

The content of this issue is also summarized briefly in a YouTube video.

https://www.youtube.com/watch?v=whfsWWreSrA

Reference sources

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This article is intended for informational purposes and economic commentary based on publicly available information.

It does not recommend the buying or selling of any specific financial products.