Japan's Indexes Advanced 3% and Yen Drifted to One-Year Low

Akira Ito
13 Jan, 2026
Tokyo

Japan's stocks advanced Tuesday amid easing trade tensions with China as investors returned from a three-day weekend. 

The Nikkei 225 Stock Average increased 3.3%, the broader Topix Index gained 2.4%, and the yen weakened further to 158.72 against the U.S. dollar.

Market sentiment improved in Tokyo after China clarified that its export control on dual-use goods and technology applies for military use only, easing worries about civilian use.

Japan's benchmark indexes extended the previous week's gains as investors reviewed the unexpected increase in household spending driven by winter purchases. 

The yen continued to drift towards a one-year low as the U.S. dollar edged up in international trading, and Japanese companies are likely to report higher earnings partly driven by the yen's weakness. 

The yen continued to drift lower after Prime Minister Sanae Takaichi was expected to dissolve Japan's parliament as early as next month, adding another level of uncertainty. 

Investors overlooked the Trump administration's investigation targeting the Federal Reserve and Fed Chair Jerome Powell as the U.S. president ramped up his campaign to remove the head of the central bank. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average soared 3.3% to 53,682.17, and the broader Topix Index advanced 2.4% to 3,598.05. 

Defense stocks extended gains for the fourth week in a row amid expectations of higher government spending and looser export control.

IHI Corp. gained 5.7% to ¥3,421.0, Kawasaki Heavy Industries jumped 9.9% to ¥13,595.0, and Mitsubishi Heavy Industries gained 4.4% to ¥4,457.00.

Banks and financial services providers increased as the traders anticipated the Bank of Japan to continue to raise interest rates at least two times in 2026. 

Sumitomo Mitsui Financial Group increased 2.7% to ¥5,394.0, Mitsubishi UFJ Financial advanced 4.5% to ¥2,762.0, and Mizuho Financial gained 5.3% to ¥6,524.0.