Japan's Indexes Soared 2% and Four-Decade Low Yen-Level Triggers Intervention Risk

Akira Ito
18 Jun, 2026
Tokyo

Japan's indexes soared on Thursday amid optimism over the U.S.-Iran peace agreement and the reopening of the Strait of Hormuz. 

The Nikkei 225 Stock Average soared nearly 2%, and the broader TOPIX increased 1.4% as investors welcomed the possible ending of hostilities in the Middle East. 

The deal framework is likely to pave the way for a possible longer-term agreement, which could normalize traffic through the Strait of Hormuz and ease tensions in the Middle East. 

The easing of geopolitical tensions removed significant macroeconomic hurdles for Japan's economy, which depends heavily on imports of energy products. 

Brent crude oil prices dropped 2.2% to $77.85 a barrel, and the Japanese yen weakened to 160.35 against the U.S. dollar. 

The yield on 10-year Japanese bonds held around 2.64% as investors reviewed the latest U.S. Fed rate decisions. 

The Federal Open Market Committee left its federal funds rate range unrevised between 3.5% and 3.75%, but the newly appointed Fed Chair Warsh confirmed that support for a rate hike later in the year is rising.

Earlier in the week, the Bank of Japan raised its short-term rates by 25 basis points to 1.0%, the highest since 1995 amid rising inflationary pressures linked to the U.S.-Iran war.

The central bank moved to shore up the faltering yen, and the embattled currency is trading near four-decade lows. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average rose 1.9% to 71,204.14, and the broader TOPIX advanced 1.4% to 4,070.02. 

Financial services providers and AI-linked stocks led gainers in Tokyo trading on Thursday. 

Sumitomo Mitsui Financial increased 4%, Mitsubishi UFJ Financial advanced 3%, and Mizuho Financial gained 3.2%. 

Tokyo Electron, Advantest Corp., Kioxia Holdings, and Lasertec Corp. advanced between 3% and 6%.