Market Summary - July 3, 2026

Key Highlights

• JP225 Performance: The Japan 225 index (JP225) experienced a significant rally, gaining 2% and rising from approximately 67,700 to 69,700 points between 2 PM GMT and 8:45 AM GMT.
• Support from South Korean Markets: A recovery in South Korean equities contributed to the positive momentum in broader Asian markets, particularly benefiting Japan's technology sector.
• SoftBank's Decline: Despite the overall rebound in Japanese equities, SoftBank ADRs (SFT.DE) saw a decline of nearly 30% from their recent highs.

Market Analysis

The JP225 futures contract rose more than 2%, bolstered by the continued weakness of the Japanese yen, which enhances the earnings outlook for Japan's leading exporters. The Nikkei 225 index also increased by 1.5%, recovering some of its recent losses, with sectors such as real estate, banking, and semiconductor materials leading the charge.

Top Performers

Among the strongest performers in the semiconductor sector were:

• Rohm (+14%)
• SUMCO (+11%)
• Kioxia (+9%)

This suggests a renewed interest from investors in selected semiconductor supply chain stocks following a recent sharp correction.

Market Breadth

The market breadth was notably strong, with advancing stocks outnumbering decliners by more than three to one on the Tokyo Stock Exchange. This indicates a broad-based buying trend rather than gains concentrated in a few large-cap stocks.

Volatility and Macro Environment

The Nikkei Volatility Index has declined by 27% to its lowest level in three months, signaling an improving risk appetite among investors and easing concerns about near-term market volatility. The macroeconomic backdrop remains moderately supportive for Japanese equities, with Brent crude prices recovering above $72 per barrel, a weak yen, and a 1.5% increase in gold prices, reflecting ongoing demand for defensive assets despite the positive sentiment in equities.

Technical Analysis

The JP225 futures contract is currently trading below both the 50-period and 200-period Exponential Moving Averages (EMAs), indicating that bullish momentum needs to be established to regain control of the trend. Key resistance is identified around the 7,000 points level, with a sustained breakout above this threshold potentially leading to a move towards 7,200 points, where significant resistance has previously been observed.

SoftBank's Performance

SoftBank Group Corp (SFT.DE) has seen a decline of over 30% from its record highs in early June. If the current decline stabilizes, it may resemble a 1:1 corrective pattern similar to that observed in autumn 2025. Key support is noted near the 28 level, where the 200-day EMA is positioned, while resistance is around 35, coinciding with the 50-day EMA and a significant price gap.

Conclusion

The overall market sentiment appears to be improving, with strong performances in key sectors and a favorable macroeconomic environment. However, investors should remain cautious of volatility and the performance of individual stocks, particularly in the technology sector.