Japan Indexes Trimmed Weekly Gains to 4%, Tokyo Core CPI Eased but Stayed Above BoJ Target

Akira Ito
25 Jul, 2025
Tokyo

Stocks in Japan corrected on Friday following a sharp rally this week that pushed indexes to new record highs. 

The Nikkei 225 Stock Average decreased 0.9%, and the broader Topix fell 0.8% as investors booked profit after the recent market rally. 

The optimism surrounding the Japan-U.S. trade agreement buoyed benchmark indexes by 4% after a week of trading. 

The U.S. lifted its import duties on Japanese goods to 15% from the current average of 3%, but lower than the 25% threatened by the Trump administration. 

Prime Minister Shigeru Ishiba said Japanese companies plan to invest $500 billion in the U.S., targeting the automobile and pharmaceutical sectors, but did not disclose the timeline. 

 

Tokyo Core Inflation Cooled In July

The Tokyo area's inflation edged down for the second consecutive month, benefiting from the easing of inflationary pressures for energy, water, and rice prices. 

The overall consumer price inflation was 3.2%, and core inflation, which excludes food prices, cooled to 2.9% from 3.1% in June, the Ministry of Internal Affairs and Communications said Friday. 

Water prices plunged 34.6% for the second consecutive month, indicating the largest decrease in prices since record keeping began in 1971. 

Core inflation excluding energy prices was 3.1%, unchanged from the previous month. 

After the government rolled out a series of measures to boost rice supply, price inflation slowed to 81.8% from 90.6% in June. 

However, food price inflation excluding fresh products accelerated to 7.4% in July from 7.2% in June and rose at the fastest pace since September 2023. 

Moreover, Japan's leading food companies are planning to increase prices on 2,105 products this month, nearly five times more than a year ago, according to an update by Teikoku Databank.

Tokyo's inflation data are closely watched by economists as a leading indicator for nationwide trends. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.9% to 41,450.31, and the Topix dropped 0.8% to 2,952.63. 

Toyota Motor Corp. decreased 2% to ¥2,787.0, Honda Motor Co. Ltd. declined 1.9% to ¥1,621.0, and Nissan Motor Co. Ltd. fell 2.8% to ¥325.0. 

Shin-Etsu Chemical Co. Ltd. dropped 9.5% to ¥4,530.0 after the company estimated a weaker-than-expected annual profit outlook in the latest fiscal year.

Lasertec Corp. declined 3% to ¥16,450.0, Tokyo Electron fell 0.2% to ¥27,960.0, and Advantest Corp. jumped 1.4% to ¥11,495.0.