Japan’s equity market began Thursday’s session with modest gains as the Nikkei 225 ticked up, but caution prevailed amid yen volatility and global repositioning ahead of month-end flows.
modest gains at open
The Nikkei 225 opened slightly higher, building on the previous session’s gains, though trading was tentative as investors weighed external pressures and local sentiment. The index’s upward move appeared to reflect defensive buying in exporters, which typically benefit from a weaker yen.
yen weakness adds pressure
The Japanese yen slipped sharply against major currencies, a development that amplified market caution. The currency’s decline increases the earnings potential for export-oriented firms but also stokes inflationary risks and may raise the cost of imported inputs. The delicate balance between supportive currency dynamics for exporters and broader macro uncertainty is influencing investor behaviour.
global cues shape sentiment
Markets in Tokyo were heavily influenced by overnight developments abroad. Asian stocks generally paused in their recent rally, as investors adjusted portfolios heading into quarter end. This reshuffling added to the cautious tone in Japan’s opening trades. Reuters noted that the yen tested fresh lows, reflecting broad dollar strength and expectations of ongoing divergence in monetary policy among major economies. Reuters
domestic data offers mixed signals
Adding complexity, Japan’s August service-sector price data showed an acceleration in corporate service inflation, rising 2.7 % year on year (up from 2.6 % in July). The strong reading underlines concerns around sustained inflation pressure and could influence the Bank of Japan’s policy stance. Reuters
implications and outlook
The opening session in Tokyo reflects a market navigating between external headwinds and domestic economic signals. Exporters may find short-term support from the weak yen, but broader investor confidence hinges on clarity regarding global interest rates and Japan’s inflation trajectory. As the session progresses, attention will fall on corporate earnings updates, currency moves, and any signals from central banks abroad.
Newshub Editorial in Asia – 25 September 2025
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