Review of Last Month's Markets (August 2026)

This report provides an overview of movements in equities, bonds, foreign exchange and REITs as part of a review of market developments in August. In the equity markets, U.S. stocks remained firm, while Japanese stocks also rose, with notable gains in the major indexes. Economic conditions in the U.S., Japan and Europe remained relatively favorable, and revised GDP figures and growth outlooks were released for each region.

Current economic conditions were reflected in GDP growth rates for the U.S., Europe and Japan, with revised growth figures for the U.S. and Europe in particular being updated. Japan's initial flash estimate for real GDP in the April-June quarter showed positive growth, while weakness in domestic demand and the contribution from external demand had a combined impact. Growth trends in China and Australia were also recorded.

The current status and outlook for monetary policy included discussion of the probability of a Fed rate hike and the outlook for an ECB rate hike. With regard to the Bank of Japan's monetary policy, the impact of price and wage trends continued to attract attention and was analyzed as a factor that would also affect long-term interest rates. Across the regions, long-term interest rate movements were confirmed as a key factor influencing markets.

In bonds, equities, foreign exchange and REITs, the rise in U.S. long-term interest rates and expectations for higher rates in Europe continued, while concern about rising long-term interest rates in Japan also spread. In equities, both U.S. and Japanese companies showed firm earnings outlooks. In foreign exchange, the yen remained on a weakening trend, alongside moves toward a stronger dollar and euro. The REIT market was influenced by interest rate movements, as well as domestic factors such as rising rents in central Tokyo.