Analysis indicated that the Nikkei 225 tends to take around 1 year to reclaim highs near its June peak, and a reversal of the reversal continued alongside market movements from July onward. Trends in the SOX and KOSPI indexes, as well as the situation among US hedge funds, were also factors.
While the SOX and KOSPI indexes declined after peaking on 22 June, the Nikkei 225 temporarily bottomed on 29 July and entered a rebound phase. Some Japanese stocks, particularly AI and semiconductor stocks, rebounded, while SaaS and anime-related stocks also experienced periods of renewed decline.
From July onward, it was noted that the Nikkei 225 tends to take approximately 1 year to reclaim its highs, and a period was observed in which headwinds to momentum continued even as the index rebounded. Financial stocks ranked among the most popular sectors, while AI and semiconductor stocks were seen as likely to lead the market correction.
According to the 3 August QUICK weekly survey, financials stood out as the most popular sector, while the popularity of electrical machinery and precision instruments declined. Since the end of July, large share buyback authorizations have become more common, reaching approximately ¥20 trillion on a year-to-date basis for 2026 as of 5 August.
The earnings season was solid in its middle phase. For companies with February or March year-ends, fiscal 2026 first-quarter revenue rose 14.2% year on year and ordinary profit rose 56.9%, both showing strong growth. Meanwhile, cost of sales and selling, general and administrative expenses increased by double digits, and the effects of higher volumes and price increases were analyzed as having outweighed the increase in costs.