[September 25] Today's Stock Market Report: Nikkei Average Rises 850 Yen to Reclaim 66,000 Level & TOPIX Rebounds Sharply!

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The truth behind the ‘all 31 sectors rising’ driven by the relief of the US-China summit ‘passing in a friendly mood’ and end-of-September dividend capture. No blind spots in the AI bubble.

• Nikkei Stock Average Closing Price : 66,364.20 yen (+850.21 (+1.30%))

• TOPIX : 4,128.59 points (+53.29 (+1.31%))

• Trading Value (TSE Prime) : 7.808881 trillion yen

• Number of advancing stocks: 1118 / Number of declining stocks: 382 / Unchanged stocks: 54

• External Market Environment: US-China summit passed safely (friendly mood, agreement to continue dialogue), US stocks rose

• Notes: Fast Retailing, Recruit, and Kyocera rose. Meanwhile, Shimizu Corp, Chugai Pharmaceutical, and Taisei Corp fell.

1. Market Close: Recovery of the 66,000 yen major level and sharp rebound in TOPIX, ‘relief risk-on’ covering the market

On Friday, September 25, 2026, the Tokyo stock market, entering the weekend trading, saw the US-China summit held in the US the previous day pass safely as they confirmed the continuation of dialogue in a friendly mood while avoiding a decisive clash. Additionally, real demand for dividend capture ahead of the ‘final day with rights for the end-of-September interim dividend’ coming up next Monday provided strong support, leading to a rush of risk-seeking buying across a wide range of stocks from the opening. The Nikkei Stock Average maintained a firm trend throughout the day and ended the trading session by powerfully recovering the 66,000 yen level for the first time in about half a month.

The closing price of the Nikkei Stock Average was up 850.21 yen (plus: 1.3%) from the previous business day to 66,364.20 yen, marking the 5th consecutive day of gains. Recovering the 66,000 yen level on a closing basis is the highest level in about half a month (about 2 weeks) since September 7th of this month.

Meanwhile, TOPIX (Tokyo Stock Price Index), a broad indicator of the entire TSE Prime market that had fallen back the previous day due to rising interest rates and selling of domestic demand stocks, also completely aligned with the Nikkei Average and rebounded fiercely. The closing price was up 53.29 points (increase rate: 1.3%) from the previous business day to 4,128.59 points, recording a sharp rebound for the first time in 3 business days. This also reclaimed the highest level since September 1st of this month and has completely returned to an upward trajectory toward the all-time high in July (4,197 point level).

The trading value of the TSE Prime market was 7.808881 trillion yen (estimated trading volume of 2.14919 billion shares). Although it fell slightly short of the 8 trillion yen mark, it can be seen that the psychological burden on market participants was completely wiped away by safely passing the massive geopolitical risk event of the US-China summit.

The biggest highlight of today’s market is ‘the overwhelming across-the-board rise of the entire market (dramatic improvement in breadth)’. While the previous day was a distorted high-tech localized battle where declining stocks accounted for the majority, today ’31 out of 33 sectors’ on the TSE Prime market rose, and only 2 sectors (Information & Communication, Construction) fell. Despite the domestic 10-year government bond yield temporarily exceeding the 3.1% level and interest rates rising further, financial stocks such as banks and securities were bought explosively as they perceived high interest rates as profit improvement, and growth stocks such as AI semiconductor stocks also moved firmly, making it a day where an ‘ideal across-the-board rise through the cooperation of value stocks and growth stocks’ was realized.

2. Mechanism of the market surge: The double engine of relief over the US-China ‘trade truce and expansion of cooperation’ and end-of-September dividend capture

The background to the Tokyo stock market maintaining strong buying dominance throughout the day from the morning and achieving a sharp 1.3% rise in both the Nikkei Average and TOPIX lies in two major driving forces: the retreat of geopolitical risks shaking the global economy and fixed-yield demand as a seasonal factor.

① US-China Summit: Avoided intensifying confrontation and agreed on ‘continuation of economic dialogue’

The US-China summit held in the United States yesterday yielded extremely positive results that far exceeded prior concerns.

Both leaders officially confirmed that they will continue dialogue and expand cooperation in a wide range of areas, including economy and trade..

Prior to the summit, an agreement was reached between US Treasury Secretary Bessent and Chinese Vice Premier He Lifeng to “extend the US-China trade friction ceasefire (tariff suspension) for two months,” but even in the direct meeting between the leaders, a decisive escalation of conflict was avoided, and the fact that it passed safely in a friendly atmosphere gave a sense of relief to market participants around the world.

This became the deciding factor for hedge funds and institutional investors, who had feared supply chain disruptions and tighter regulations on advanced semiconductors due to US-China tensions, to shift toward risk-taking in unison in Asian markets, including Japan.

② Countdown to the end of September: “Final day with dividend rights (next Monday)”

What strongly supported the market from the perspective of actual demand was the approaching dividend calendar.

The “final day with rights for interim dividends” for Japanese companies with a March fiscal year-end is set for next Monday (September 28). Today, Friday, was the practical last chance (the Friday just before the ex-rights date) to secure actual demand buying ahead of the record date.

Following their first-quarter financial results, Japanese companies have been strengthening shareholder returns, such as share buybacks and dividend increases, at a record pace. Dividend reinvestment funds from institutional investors seeking to reliably enjoy high dividend yields and NISA funds from individual investors flowed intensively into financial stocks and high-dividend value stocks, which will be discussed later.

③ Japanese stocks strongly supported by the domestic interest rate entering the “3.1% range”

Today, in the bond market, the yield on the newly issued 10-year Japanese government bond rose to the “3.1% range” at one point, and interest rate levels moved up another notch.

In a normal market, “rising interest rates” are often perceived as a “burden on high-PER growth stocks,” but today, in addition to the huge sense of relief from the progress in US-China dialogue, the momentum of AI semiconductor stocks that surged the previous day continued, so selling pressure on growth stocks was limited.

On the contrary, the financial sector, where rising interest rates lead directly to the expansion of core business profits (higher lending rates and improved bond investment yields), attracted fierce buying, creating an ideal cycle where the engine of the entire market was fully ignited.

3. Market Internal Structure: Both-wheel drive by the “completion of dovish digestion” of financial stocks and the continued rise of AI semiconductors

Examining the internal market today, where the Nikkei Average rose 850 yen and the TOPIX rose 53 points, it is confirmed that the driving force behind the market has evolved dramatically from “concentration on specific stocks” to a “structure where high-tech and finance work together as both wheels to push up the entire market.”

Dramatic reversal of the financial sector: Return from “dovish acceptance” to “profit improvement”

Immediately after the “0.25% rate hike (2 dissenting votes)” was decided at the Bank of Japan’s Monetary Policy Meeting last Friday (the 18th), the market focused on “selling on the news” and “a slowdown in the future pace of rate hikes due to the dissenting votes (dovish interpretation),” forcing financial sectors such as bank stocks to remain sluggish until yesterday.

However, the dramatic rebound of financial stocks today is due to the following.

With the short-term position adjustments following last week’s meeting having run their course, the market’s gaze has returned to the strength of the fundamentals, namely 『the essential expansion of interest margins and profit improvement for banks, life insurers, and non-life insurers due to domestic long-term interest rates reaching the 3.1% range.』 In addition, bank, securities, and insurance companies have extremely high dividend yields as a sector, and due to the concentration of actual demand money aiming for interim dividend rights next Monday, intense buying for reassessment has entered is the reason.

The healthiest pattern of market rise has been completed, with financial stocks solidifying the foundation of the market and high-tech stocks chasing the upside of the index.

4. Trends by Sector and Industry: “31 out of 33 industries rose”! The truth behind the financial sector’s dominance and the 2 declining industries

Looking at the performance ranking by industry, a spectacular market-wide rally unfolded, with 31 out of all 33 sectors rising and only 2 sectors declining.

[Top Rising Sectors: Complete Dominance by the 3 Financial Sectors and High-Tech Manufacturing]

• Banking, Securities & Commodity Futures, and Other Financial Businesses (dominating the top 3 gainers): The financial sector saw the most tremendous inflow of funds among all industries. Mega-banks (Mitsubishi UFJ, Sumitomo Mitsui, Mizuho) and major regional bank stocks surged across the board, while securities stocks and leasing companies were also bought up, buoyed by high trading volume in the stock market (partly due to the effect of JPX’s upward revision the previous day). The earnings benefits of the 3.1% interest rate range and the capture of high dividends at the end of September merged perfectly.

• Electric Appliances & Precision Instruments: Maintaining the momentum from after the long weekend, core semiconductor supply chain stocks such as Ibiden, Tokyo Electron, and Advantest continued to rise. The safe passage of the US-China summit solidified a sense of relief for high-tech exporters.

• Broad-based Recovery in Domestic Demand and Value Stocks: Wide-ranging buying returned to sectors that were sold off the previous day, including steel, chemicals, machinery, automobiles (transportation equipment), land transportation, and retail, supporting the 1.3% rise in the TOPIX.

[The Truth Behind the Declining Sectors: 2 Sectors Driven by ‘Individual Bad News’ Rather Than the Overall Market]

On the other hand, only 2 out of 33 sectors sank into negative territory today, but the reason was completely limited to individual factors of specific major stocks, rather than a deterioration in the overall market sentiment.

• Information & Communication (Decline): The sluggish performance of SoftBank Group, which has an extremely high impact on the Nikkei Average, dragged down the entire sector. However, within the sector, DX and software stocks such as Oracle Japan (mentioned later) were bought steadily, showing a polarization in content.

• Construction (Worst Decline): The announcement by Shimizu Corporation, a major general contractor, of a 100 billion yen issuance of convertible bonds (CB) with stock acquisition rights dealt a strong shock to the market, and the sharp drop in the company’s stock pushed down the entire construction sector.

5. Notable Individual Stocks

Today, we will explain the trends of notable stocks that showed extreme price movements due to good earnings exceeding market expectations, surprise large-scale fundraising announcements, speculation over huge acquisition proposals (privatization), and the benefits of the new AI trend.

① Oracle Japan

Oracle Japan, a major independent IT system development and cloud company, rebounded sharply by +8.1% (+745 yen) and surged toward its all-time high.

The company announced its financial results after the market closed on September 24.
Consolidated operating profit for the first quarter (June-August) of the fiscal year ending May 2027 achieved a 23% increase compared to the same period last year. This was a positive surprise that significantly exceeded market consensus forecasts.
In addition to the acceleration of corporate DX investment, demand for the cloud service ‘Oracle Cloud Infrastructure (OCI)’ exploded. While sales grew strongly, thorough control of selling, general and administrative expenses (operating costs) progressed, and the operating profit margin improved dramatically.
In addition to extremely strong inquiries from government agencies (Government Cloud) and major electric power companies, the ‘cloud migration of core accounting systems’ at major financial institutions has entered a full-scale phase. ‘Long-term demand expansion by large customers is guaranteed going forward, and the earnings base is extremely solid.’

② Shimizu Corporation

Major general contractor Shimizu Corporation was hit by a large volume of sell orders from the opening, plunging 5.9% (-140 yen) from the previous day. During trading hours, it approached its year-to-date low.
On the evening of September 24, it announced that it would issue ‘Euro-yen denominated convertible bonds (CB)’ for a total of 100 billion yen in the European market. The plan is to allocate 90 billion yen of the 100 billion yen raised to ‘M&A funds for growth’ and 10 billion yen to ‘share buybacks’.
The background to the sharp drop in the stock price immediately after the announcement is that, in addition to concerns about the risk of dilution of earnings per share (EPS) due to future stock conversion, hedge selling by investors aiming for arbitrage (a method of purchasing CBs and short-selling the underlying physical stock) increased, leading to stronger concerns about short-term supply and demand deterioration.

On the other hand, calm and positive evaluations have also been shown regarding the design (structure) of this CB. This issue is characterized by the fact that it is issued at zero interest (zero coupon), thoroughly suppressing procurement costs (interest payments) in a rising interest rate environment. Furthermore, clauses that prevent conversion unless the stock price clears a certain level and ‘face value cash settlement’ acquisition clauses are included, adopting a sophisticated mechanism to avoid disorderly stock conversion and excessive dilution as much as possible.

However, the 100 billion yen procurement scale is extremely large for the company and was an unexpected surprise for the market. While there is room to evaluate the design as a capital policy and the significance of growth investment, concerns about supply and demand remain strong for the time being, and it is expected that the stock price will continue to be conscious of being weighed down in the short term.

③ Kobayashi Pharmaceutical

Major household medicine and daily necessities company Kobayashi Pharmaceutical was bought up to the upper limit of the price range, a 1,000 yen increase (+16.9%) stop-high, and closed with a proportional distribution at the stop-high.

Following some reports that the company is considering taking the company private (MBO/delisting), the company issued a timely disclosure. In the disclosure, the company acknowledged that it has officially received a “non-binding preliminary acquisition proposal” regarding going private from entities related to leading private equity (PE) funds, “Nippon Sangyo Suishin Kiko (NSSK)” and “CVC Capital Partners.”

In response, the stock market saw a rush of speculative buying aimed at potential acquisition premiums (expectations of a higher TOB price) in the event that a friendly tender offer (TOB) is conducted in the future.

On the other hand, the company emphasized that “at this point, no decision has been made to go private,” and there are multiple hurdles to reaching an agreement. In addition to activist funds being listed among the company’s major shareholders, there are various issues to clear, such as confirming the intentions of the founding family and negotiating the validity of the proposed acquisition price. At this stage, it is limited to the receipt of a preliminary proposal, and it is necessary to keep in mind that uncertainty remains regarding the future.

④ Ibiden

Ibiden, which soared over 14% the previous day against the backdrop of the Meta AI agent “Muse” craze, continued to rise today without losing momentum. It entered the top tier of positive contributors to the Nikkei Average and fully recovered to its highest level since July 3.

The conviction that special demand for ultra-multi-layer package substrates for server CPUs, which control the autonomous operation of AI agents, will continue in the medium to long term continues to attract large amounts of capital from both domestic and overseas investors.

6. Future Outlook: A Thorough Preview of Next Week’s “US Micron Earnings,” “US August PCE,” and “BOJ Tankan”

The Tokyo market today, where the Nikkei Average reclaimed the 66,000 yen level for the first time in half a month and 31 out of 33 sectors rose, proved that the market sentiment has brilliantly shifted from a “suspicious adjustment market” to a “confident autumn rebound market,” having obtained a powerful catalyst in the form of the smooth passage of the US-China summit.

Regarding the market outlook for next week (the 5th week of September to early October), we present the following specific schedule and checkpoints.

① September 28 (Mon): Japan’s “Final Day with Rights for Interim Dividends for Companies with March Fiscal Year-Ends”

・At the beginning of the week, real demand buying for dividend rights will support the market. ・After the ex-dividend date on the 29th (Tue), a temporary downward pressure factor on the index (dividend drop) will occur, but since dividend reinvestment funds will flow back into the market through October, it will be a good opportunity to form a dip in the market.

② September 30 (Wed): Earnings Announcement of US Semiconductor Giant “Micron Technology”

・The biggest event that will determine the global AI semiconductor and memory market. ・The biggest focus: Demand trends for “HBM (High Bandwidth Memory)” for AI servers and advanced DRAM, and future guidance. ⇒ If Micron shows a bullish outlook, it will be the trigger for the entire semiconductor supply chain, including Japan’s Kioxia HD, to enter a fierce rally chasing higher prices again.

③ September 30 (Wed) Night: US “August PCE (Personal Consumption Expenditures) Price Index” Announcement

・An important indicator where a resurgence of inflation in the US is feared, given that crude oil prices have remained high. ・In his Jackson Hole speech in August, Fed Chair Warsh pointed out that “in judging underlying inflation, analysis of individual items that make up the PCE is important.” He expressed concern that the “ratio of items whose prices have risen by 3% or more year-on-year” remains at a high level. ⇒ The focus is not just on the inflation rate figure itself, but on “whether inflationary pressure is spreading to a wide range of items.” ⇒ Depending on the results, there is a risk that US long-term interest rates will rise further, so vigilance cannot be relaxed.

④ October 1 (Thu) Morning: Bank of Japan “September Tankan (Short-Term Economic Survey of Enterprises in Japan)” Announcement

・The most important statistic to measure the strength of the Japanese economy and corporate performance. ・In the previous survey (June Tankan), the “Large Manufacturing DI” recorded its highest level in about 8 years against the backdrop of expanding AI-related demand. ・In the September “QUICK Tankan,” which is considered a leading indicator, the manufacturing DI has updated its “all-time high.” ⇒ If it is confirmed that the improvement in corporate business sentiment is continuing, strong corporate sentiment will become a powerful support material (fundamental backing) for Japanese stocks.

Action Plan for the October “All-Time High Reclaiming Market”

The biggest message that today’s market showed is that “Japanese stock fundamentals and shareholder returns are resilient enough to completely defeat the headwinds of rising interest rates”.

The fact that the financial sector, led by bank stocks, has taken center stage at a time when domestic long-term interest rates have entered the 3.1% range tells us that rising interest rates are no longer being accepted as an “enemy of stock prices” but as an “engine for the normalization of the Japanese economy and profit expansion.”

Next week, there is a possibility that the market could be temporarily shaken by the dividend ex-rights date at the start of the week and nervous interest rate movements following the release of U.S. PCE data.

However, against the backdrop of a solid international environment characterized by the stabilization of U.S.-China relations, if the sustainability of AI memory demand is reaffirmed in Micron’s earnings on the 30th and the Bank of Japan’s Tankan survey on October 1st shows business sentiment at record-high levels, the uncertainty constraining the Tokyo market will completely vanish.

We are currently in an ideal investment phase where we should maintain a well-balanced portfolio of ‘structurally growing high-tech stocks’ like Ibiden and Oracle Japan, which reclaimed their highs for consecutive days today, and ‘high-dividend value stocks’ such as banks and securities that benefit from interest rate hikes, in order to reap the greatest rewards from the ‘Nikkei Average exceeding 67,000 and TOPIX completely updating its all-time high (4,197 pts) market’ that will arrive after the events of next week pass.