How will FANG+ and NASDAQ100 move? The secrets of long-term holding to turn interest rate hikes in Japan and the US and a stronger yen into opportunities

Many of you may have been surprised to see the news that interest rate hikes were decided in both Japan and the United States simultaneously.

This marks the first interest rate hike in 3 years and 2 months for the US, and the first in 31 years for Japan to reach such a high level, with both being raised by 0.25%.

This is the first interest rate hike in 3 years and 2 months for the US, and the first in 31 years for Japan to reach such a high level
with both being raised by 0.25%.

First, let’s look back at the recent situation.

Stock prices after the interest rate hike and sector-specific movements

Above all, the FOMC was the biggest focus.
Immediately after the interest rate hike was decided, stock prices dropped sharply, but since then, they have shown an unexpected and rapid recovery.

FANG+ rose by 2.58%, NASDAQ by 1.98%, and the SP500 by 0.67%.
On the other hand, the All Country World Index (ACWI) only rose by 0.37%, and as a result, semiconductor stocks have seen a 2% increase.

Looking at the monthly rate of return,
September is already more than halfway through.
September is famous as a period when US stocks perform poorly, but
this time, only the ACWI is in the negative, while other indices are maintaining a slight positive.

Despite the major event of an interest rate hike,
the market as a whole seems to be holding up without collapsing significantly.
The strength of being bought back immediately even after a decline can be said to be a characteristic of the current market.

Investor sentiment and interest rate hike forecasts from next week onwards

Looking at investor sentiment,
the figure is very calm at 14.81, partly because stock prices are performing well.
Regarding the RSI, which indicates whether a stock is overbought or oversold, it was sold off sharply after the interest rate hike decision and touched 30 just barely, but it immediately rebounded and was bought back.

At the September FOMC, a 0.25% interest rate hike was decided, but immediately after it ended, the probability of a further interest rate hike in October

is around 57% according to the figures. The observation that another hike will come within the year is spreading.

Regarding the dollar-yen exchange rate,
it had moved toward a stronger yen to nearly 152 yen at one point, but
it has now returned to 156 yen.

Since both Japan and the US raised interest rates at the same time, the interest rate gap remains unchanged, which seems to be why it has recovered slightly.

Looking at the indices, NASDAQ rose by about 2%, and
year-to-date, the Nikkei Stock Average is up 26.44%.
I want to continue to pay attention to how it will move in the future following the interest rate hike.

For high-tech stocks, FANG+ is in great shape with a 2.58% gain.
In particular, rather than semiconductors themselves,
semiconductor manufacturing equipment-related stocks rose well.
The SOX index is maintaining the 50% range, and Japanese semiconductor stocks are also in great shape.
They have exceeded 70% year-to-date again.

Some of you may feel that your assets are decreasing due to the recent progress of the stronger yen, but

I see this as a timing to buy at a low price, and my policy is to continue buying more without worrying about it.

In this episode, I will explain in detail why both Japan and the US decided to raise interest rates simultaneously,
whether this rate hike will be the last or if it will continue later this year,
and how this will rebound on high-tech stocks like FANG+ and NASDAQ100.

In conclusion,
the simultaneous interest rate hikes in Japan and the US have been decided, and there is a high probability of another round of rate hikes within the year
, and while there is a possibility of stock prices falling and the yen strengthening in the short term, I believe this will be an excellent time for long-term investors to accumulate positions.

There is no need to panic.

It is quite rare for Japan and the United States to raise interest rates in the same week.

Background of Japan-US interest rate hikes and their impact on daily life

The US interest rate hike decision and the outlook indicated by the dot plot

In the United States, at the FOMC meeting on September 16, the policy interest rate was raised by 0.25% from
3.75% to 4%. This rate hike is the first in
3 years and 2 months
since 2023.

There are 12 voting members at the FOMC, and
this time, all 12 members voted in favor of the rate hike, with zero opposition.

In the statement released by the FOMC, it is noted that while economic activity is expanding at a healthy pace, inflation remains high.

In other words, although the economy is relatively solid, the high level of inflation is the basis for the Fed’s decision to raise rates.

So, how much do the FOMC members consider appropriate for future policy interest rates?

Looking at the dot plot where members predicted future policy interest rates,
four people predicted the policy rate at the end of 2026 would be 4.375%, the most common prediction was 4.125% by 12 people
, and two people predicted 3.875%, meaning they expected it to remain unchanged.

Looking at the median of the entire group, it is 4.125%. Since the upper limit of the policy interest rate range reached by this rate hike is 4%, the median forecast is even higher than that,

which means it indicates another round of rate hikes within the year.

Summarizing the median forecasts released by the FOMC, GDP growth is expected to slow gradually from 2.3% in 2026 and head toward 2% in the long term, and

no sharp economic recession is anticipated.

The unemployment rate is expected to be around 4.1%, and strong employment is expected to continue. And regarding the price indicators that are the biggest focus, PCE and the more realistic core PCE, it is expected that it will take until

2029

to reach the Fed’s 2% target.

The Fed is acknowledging that achieving the 2% inflation target is still three years away.
In other words, we must assume that there will be no aggressive interest rate cuts in the future.

In addition to the expectation of another interest rate hike within the year,
the median for 2027 is also at 4.1%,
so unfortunately, a future where interest rates drop significantly next year is not being envisioned.

President Trump’s reaction and Japan’s interest rate hike

Just a few hours after the FOMC decision,
President Trump reacted immediately on X.
“US interest rates should be 1% or lower,
cut them quickly”, he said,
demanding a rate cut from the Fed with full force.

The background to this is the US midterm elections in November, which he is very conscious of. Interest rate cuts that support the economy and the stock market are,
for the Trump administration facing midterm elections,
a positive factor for the economy and the public’s livelihood above all else.

This is because it will greatly influence whether the Republican Party can maintain control of Congress
and whether they can advance their policies as they wish during the remainder of their term.

And on September 18,
an interest rate hike was officially decided at the Bank of Japan’s Monetary Policy Meeting.
The policy interest rate is from 1% to 1.25%,
a 0.25% hike.

Looking at the transition of Japan’s policy interest rates to date,
we can see that for 30 years, Japan has only been fighting
with interest rates at nearly 0 or negative.

In 2024, the negative interest rate policy was lifted,
and with interest rate hikes continuing in 2025 and 2026,
it has finally reached 1.25%.
This is the highest level in 31 years since April 1995.

The impact on investment and is a stronger yen really a loss?

So, how will this interest rate hike specifically affect
our lives and investments? First, bank deposit interest rates; this is a positive factor.

Since bank interest rates will rise,
the savings you have deposited will be more likely to benefit from it.

On the other hand, what about home loans?
This is an increase in costs.
For both individuals and companies,
the increased costs will weigh heavily.

However, I would like to consider the point of whether a stronger yen is really a loss.
Suppose you bought 1 million yen worth of everyone’s favorite FANG+.
If the base price is 20,000 yen when the rate is 160 yen,
the number of units you can purchase would be 500,000 units.

And suppose the yen strengthens to 150 yen.
Since there is no currency hedge, the base price drops as the yen strengthens,
and at this time, the base price drops to 18,750 yen.

Then, with the same 1 million yen, the number of units you can buy becomes 533,000 units.
In other words, even with the same 1 million yen,
when the yen strengthens, you can buy 6.7% more units.
This is the reason why I think this is the time to prepare.

Index investment is ultimately a game of
how many units you can increase.
It is not that your held assets have decreased due to a stronger yen,
but rather it can be seen as an environment where long-term investors can buy in at a lower price.

The debate over whether AI might destroy humanity

OpenAI’s denial of an IPO and Anthropic’s warning

Now, let’s shift our perspective a bit and
take up a major theme currently being discussed in the market.
Recently, the claim by developers that
AI might destroy humanity has been buzzing.

OpenAI has denied an IPO within the year.
OpenAI, the company behind ChatGPT, has clearly stated that there will be
no IPO in 2026.

The reason is their view that because AI has safety issues,
it should not go public.
Their rival, Anthropic, also
warns that AI is advancing rapidly and in the not-too-distant future,
it could lead to the extinction of humanity.

And Elon Musk has also agreed that this thinking from OpenAI and Anthropic
is correct.

The impact of these statements was clearly reflected in stock charts.
As soon as Anthropic stated on September 14th that
the pace of AI development needs to be slowed down,
semiconductor and AI-related stocks like Nvidia, AMD, and Intel
were sold off across the board in a downward trend.

The reason developers are cautious

So why are developers so cautious?
It is because AI conducts its own research and development,
creating smarter AI,
and that improved AI creates even smarter AI;
if this repeats, AI will become increasingly intelligent,
and it is said that humans will no longer be able to keep up with AI’s capability improvements because of this.

While AI progress is remarkable,
the development of safety measures and control systems is not keeping up with that progress at all.

Since it is evolving from an AI that follows human instructions to an AI that improves itself,
if used incorrectly, it could lead to cyberattacks or even weapons development, which is why they are sounding the alarm that it could destroy humanity.

Therefore, the development side is arguing that
we should prioritize safety measures and legal frameworks over improving AI capabilities.
In the near future, an era where AI has its own will,
like in Terminator, might actually come.

AI has progressed from an entity that responds to human instructions
to one that plans and conducts its own research and development.
If AI’s capabilities
surpass the safety measures and control mechanisms prepared by humans,
this is the risk currently being feared in the AI industry.

President Trump’s stance and the US-China conflict

Regarding this statement that development should be slowed down,
President Trump has stated,
“If we don’t win with AI, we will be in a very bad position,”
“At the moment, we are leading China by a significant margin.”

It is a statement that is very conscious of China,
and now the US and China are the two giants in AI development.

Both sides understand that AI is a technology that determines the fate of a nation, and they know that
the US and China controlling advanced AI technology
leads to an advantage not only in the economy but also in national security.

That is precisely why it is said that it is practically impossible for the US and China to reach an agreement on regulating AI development.
If only the United States slows down AI development,
a risk arises that China will seize AI hegemony in the meantime.

This structure is the reason why AI development cannot be stopped.

Therefore, I feel there is a certain rationality in President Trump’s decision
not to easily agree to slow down AI development.

As someone who loves US stocks, my honest feeling is that I absolutely do not want to hand over the initiative to China.

Although the speed of AI development should be slowed down for the sake of human safety,
the circumstance that one cannot afford to be outpaced by the other country
prevents them from stopping.

Summary

A 0.25% interest rate hike has been decided in both Japan and the US,
and there is a possibility of another hike within the year.

If the interest rate gap between Japan and the US narrows, there is a possibility of the yen strengthening, but if the value of the yen rises,
it becomes a chance for foreign stock investors to buy at a low price.

And since AI is a technology that gives an advantage in the economy and national security,
it will be difficult for the US and China to reach an agreement to slow down development.

Going forward, interest rate hikes are expected in both Japan and the US,
and stock prices are likely to continue fluctuating for a while, but
I believe we should continue to buy without hesitation.

Like this time, due to movements surrounding interest rate hikes, a stronger yen, and AI,
high-tech stocks such as FANG+ and NASDAQ100
could also move significantly.

Amidst these market changes,
what points should one be careful about in order to continue holding high-tech stocks for a long time?

Regarding the S&P 500, I am covering in detail the points to be careful about in the future market, such as the concentration on AI/high-tech stocks and the stronger yen.

Also, regarding Japanese stocks, I touch upon ways of thinking for long-term holding, such as value stocks and dividend-increasing stocks.
I have summarized these investment philosophies, which could not be covered in detail in this article, in even greater detail.