TOPIX has tended to break higher after moving sideways following yen-buying intervention, while a Nomura Securities strategist explains that the current US dollar/yen exchange rate could have a positive impact on Japanese companies' earnings.
Yen-buying intervention was carried out in coordination between Japan and the United States. On 3 August 2026, Japanese and US authorities suggested the possibility of further intervention, and US Treasury Secretary Bessent also issued a message supporting measures to correct the yen's undervaluation. Nomura Securities is closely watching market movements and reactions immediately after the intervention.
Since 2022, TOPIX has often moved sideways for around 4 months after yen-buying intervention before breaking higher, and overseas investors have tended to maintain their interest in Japanese equities. TOPIX in US dollar terms has performed steadily, while there have been periods when domestic-demand stocks and value stocks outperformed.
Comparisons with the similarities and differences seen in August 2024 indicate that positions in Nikkei 225 futures and the movements of foreign investors now differ from those at that time. There have also been periods when external-demand companies and companies benefiting from a weaker yen underperformed. Nomura Securities is watching for periods when US equity futures have a greater influence than foreign exchange rates and interest rates.
The current US dollar/yen exchange rate is assumed to be around ¥151–152 per US dollar, while the euro/yen rate is assumed to be around ¥177–179 per euro. At these levels, Japanese companies' EPS could be pushed higher. However, the impact is expected to be less pronounced in sectors that benefit significantly from a weaker yen, such as automotive, energy, resources and machinery. The stated policy is to focus on fundamentals and valuations while keeping foreign exchange risk under control.