Tokyo stocks end higher after robust TSMC earnings
The 225-issue Nikkei Stock Average rose 237.79 points, or 0.60 percent, from Wednesday at 39,901.19. The broader Topix index finished 20.41 points, or 0.72 percent, higher at 2,839.81.
On the top-tier Prime Market, gainers were led by service, pharmaceutical, information and communication issues.
The U.S. dollar climbed to the upper 148 yen range in Tokyo, as the yen was sold amid concerns over possible fiscal deterioration through expansionary policies if Japan's ruling parties lose their majority in the House of Councillors in Sunday's election, dealers said.
The Nikkei stock index was initially pressured by chip-related shares after ASML Holding N.V., a major global supplier of chip-making equipment, flagged concern about its 2026 growth outlook on Wednesday amid macroeconomic and geopolitical uncertainty.
However, chip issues erased much of their losses after the world's largest contract chipmaker released solid earnings in the afternoon, helping to lift the market.
"While stocks have been directionless this week (ahead of the election and earnings releases), the market largely reflected the moves of chip shares," said Yuta Okamoto, market analyst at Tokai Tokyo Intelligence Laboratory Co.
Among notable gainers, land transportation issues drew buying after data showed Wednesday that Japan saw a record 21.5 million foreign visitors in the first half of 2025, while the number for June hit the highest ever for the month.
Meanwhile, Seven & i Holdings ended down 9.2 percent at 2,007.5 yen after Canadian retailer Alimentation Couche-Tard Inc. said it has withdrawn its $47 billion buyout proposal.
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The Mainichi
7 hours ago
- The Mainichi
Voting underway in Japan for upper house race, with focus on majority
TOKYO (Kyodo) -- Voting got underway on Sunday in Japan's House of Councillors election, with all eyes on whether the ruling coalition can maintain its majority amid public frustration over rising prices and growing support for emerging parties. The outcome of the election will have a strong bearing on the fate of Prime Minister Shigeru Ishiba's minority government, as failure to retain control of the upper house would make parliamentary deliberations even more difficult and could potentially cost him the premiership. With 125 seats up for grabs, the ruling bloc led by Ishiba's Liberal Democratic Party needs to win at least 50 to keep its majority in the 248-member upper house. It currently holds 75 seats in the other half of the chamber that is not being contested on Sunday. Upper house members serve fixed six-year terms, unlike those in the House of Representatives, which can be dissolved by the prime minister. Half of the upper house members are replaced in elections held every three years to prevent a complete turnover. Of the 125 seats, including one to fill a vacancy, 75 will be chosen in electoral districts and 50 through proportional representation. Around 520 candidates are vying for the seats. Voters cast two ballots -- one to select a candidate for their electoral district and the other for proportional representation, under which seats are allocated based on the total number of votes received by each group and its listed candidates. Pre-election media polls have painted a bleak picture for the ruling coalition of the LDP and the Komeito party, with smaller opposition forces expected to gain strength. During the campaign period, debate intensified over a possible cut in consumption tax and policies concerning foreigners. Ishiba spent the 17-day campaign scrambling to secure a vote of confidence in his administration, as Japan faces a myriad of challenges -- from the rising cost of living to defending national interests in tariff negotiations with the United States, a longtime ally. The Constitutional Democratic Party of Japan, the largest opposition force, aims to strip the ruling camp of its majority control of the upper house and inject momentum into its push for a change of government. Opposition parties, such as the Democratic Party for the People and the Japan Innovation Party, are united in their call to reduce or abolish the politically sensitive consumption tax to support inflation-plagued households. The populist Sanseito party, which has been using social media to attract younger voters, is seen as a potential game-changer in the election, as media polls suggest the minor group, known for its nationalistic platform, has seen a surge in popularity. Its "Japanese First" slogan has apparently struck a chord with conservatives, though its hardline stance on foreigners has drawn criticism as being xenophobic.
Kyodo News
8 hours ago
- Kyodo News
FOCUS: Japan set to meet 2% defense target, but future hikes uncertain
TOKYO - Japan is on track to achieve its target of boosting defense spending to 2 percent of gross domestic product in the next two years, but the real challenge -- whether to go beyond that level -- may come after Sunday's House of Councillors election. With the ruling bloc at risk of losing its upper house majority, Prime Minister Shigeru Ishiba's already flagging political base could complicate long-term buildup plans, despite U.S. President Donald Trump's push for allies to shoulder more defense costs. Ishiba's ruling coalition no longer controls the more powerful House of Representatives. A defeat in the upcoming election could make it virtually impossible for Japan to further increase its defense budget, as only a few opposition parties support the move. Defense Minister Gen Nakatani said, "Nothing has been determined at all" regarding Japan's defense budget for fiscal 2028 or later, despite the country's expected exposure to direct or tacit pressure from the United States to spend more than 2 percent of its GDP. In 2022, Japan decided to allocate 43 trillion yen ($289 billion) over five years through fiscal 2027 to reach the 2 percent benchmark, aligning with the then-standard among NATO members, amid growing security threats from China, North Korea and Russia. The amount includes expenses for security-related "complementary initiatives," such as research and development, public infrastructure construction and the coast guard, which are vital for bolstering Japan's defense capabilities. For decades, Japan capped its annual defense budget at around 1 percent of GDP -- roughly 5 trillion yen -- reflecting its postwar pacifist stance under the war-renouncing Constitution, while maintaining its security alliance with the United States. Nakatani said the initial defense budget for fiscal 2025, including related outlays, is set to total 9.9 trillion yen, equivalent to 1.8 percent of GDP three years earlier -- evidence, he said, of steady progress toward the government's target. To keep the 43 trillion yen outlay on track, the government has approved hikes in income, corporate and tobacco taxes, despite its debt burden topping 1,300 trillion yen -- more than twice the size of the economy. Corporate and tobacco tax hikes are set for April 2026, but the government has yet to finalize the timing of the income tax increase, even after Ishiba took over as prime minister from Fumio Kishida in October. Ishiba's Liberal Democratic Party has pledged in its election campaign to "adamantly defend our territory and citizens by fundamentally reinforcing defense capabilities," citing China's military buildup and North Korea's missiles as serious threats. Major opposition parties, including the Constitutional Democratic Party of Japan -- led by former Prime Minister Yoshihiko Noda -- and the Japan Innovation Party, also support strengthening the nation's defense capabilities. Noda, known as a fiscal hawk, has voiced opposition to raising taxes to cover increased defense spending, arguing the 43 trillion yen target lacks a solid basis. Rather than proposing alternative funding sources, he has pledged a consumption tax cut to support the economy. The LDP's junior coalition partner, Komeito, along with opposition forces -- the Democratic Party for the People, Sanseito and the Conservative Party of Japan -- have made no clear reference to how the increased defense budget would be funded. Among other opposition parties, Reiwa Shinsengumi, the Japanese Communist Party and the Social Democratic Party have all opposed expanding defense spending, calling on the government to uphold the Constitution. Masumi Ishizuki, general manager of the Policy and Macro Environment Research Department at the Dai-ichi Life Research Institute, said the defense spending plan is unlikely to change significantly, regardless of the post-election government. Ishizuki, meanwhile, pointed out that Trump, who took office in January with his "America First" banner, has been adding pressure on allies, prodding NATO countries to set a new target of investing 5 percent of GDP for defense and related expenses by 2035. Pentagon spokesman Sean Parnell has also called on U.S. allies in Asia to pursue defense goals equivalent to those of NATO members. According to a diplomatic source, Washington has already asked Japan to spend 3.5 percent of its GDP on defense. Securing sufficient financial resources to disburse such a large amount could be a tough task if the upper house election weakens the Ishiba government, as his ruling coalition is on the verge of losing its majority in the chamber. Hirohito Ogi, a senior research fellow at the Institute of Geoeconomics at the International House of Japan, said the prime minister's limited influence could make Finance Ministry bureaucrats hesitant to cooperate in increasing defense spending. If the political leader has a solid foundation, the ministry in charge of the national budget would have no choice but to cooperate, Ogi said, adding prospects for future defense spending "depend on whether the Prime Minister's Office is strong or not."
Japan Today
11 hours ago
- Japan Today
Japan set to meet 2% defense target, but future hikes uncertain
By Keita Nakamura Japan is on track to achieve its target of boosting defense spending to 2 percent of gross domestic product in the next two years, but the real challenge -- whether to go beyond that level -- may come after Sunday's House of Councillors election. With the ruling bloc at risk of losing its upper house majority, Prime Minister Shigeru Ishiba's already flagging political base could complicate long-term buildup plans, despite U.S. President Donald Trump's push for allies to shoulder more defense costs. Ishiba's ruling coalition no longer controls the more powerful House of Representatives. A defeat in the upcoming election could make it virtually impossible for Japan to further increase its defense budget, as only a few opposition parties support the move. Defense Minister Gen Nakatani said, "Nothing has been determined at all" regarding Japan's defense budget for fiscal 2028 or later, despite the country's expected exposure to direct or tacit pressure from the United States to spend more than 2 percent of its GDP. In 2022, Japan decided to allocate 43 trillion yen ($289 billion) over five years through fiscal 2027 to reach the 2 percent benchmark, aligning with the then-standard among NATO members, amid growing security threats from China, North Korea and Russia. The amount includes expenses for security-related "complementary initiatives," such as research and development, public infrastructure construction and the coast guard, which are vital for bolstering Japan's defense capabilities. For decades, Japan capped its annual defense budget at around 1 percent of GDP -- roughly 5 trillion yen -- reflecting its postwar pacifist stance under the war-renouncing Constitution, while maintaining its security alliance with the United States. Nakatani said the initial defense budget for fiscal 2025, including related outlays, is set to total 9.9 trillion yen, equivalent to 1.8 percent of GDP three years earlier -- evidence, he said, of steady progress toward the government's target. To keep the 43 trillion yen outlay on track, the government has approved hikes in income, corporate and tobacco taxes, despite its debt burden topping 1,300 trillion yen -- more than twice the size of the economy. Corporate and tobacco tax hikes are set for April 2026, but the government has yet to finalize the timing of the income tax increase, even after Ishiba took over as prime minister from Fumio Kishida in October. Ishiba's Liberal Democratic Party has pledged in its election campaign to "adamantly defend our territory and citizens by fundamentally reinforcing defense capabilities," citing China's military buildup and North Korea's missiles as serious threats. Major opposition parties, including the Constitutional Democratic Party of Japan -- led by former Prime Minister Yoshihiko Noda -- and the Japan Innovation Party, also support strengthening the nation's defense capabilities. Noda, known as a fiscal hawk, has voiced opposition to raising taxes to cover increased defense spending, arguing the 43 trillion yen target lacks a solid basis. Rather than proposing alternative funding sources, he has pledged a consumption tax cut to support the economy. The LDP's junior coalition partner, Komeito, along with opposition forces -- the Democratic Party for the People, Sanseito and the Conservative Party of Japan -- have made no clear reference to how the increased defense budget would be funded. Among other opposition parties, Reiwa Shinsengumi, the Japanese Communist Party and the Social Democratic Party have all opposed expanding defense spending, calling on the government to uphold the Constitution. Masumi Ishizuki, general manager of the Policy and Macro Environment Research Department at the Dai-ichi Life Research Institute, said the defense spending plan is unlikely to change significantly, regardless of the post-election government. Ishizuki, meanwhile, pointed out that Trump, who took office in January with his "America First" banner, has been adding pressure on allies, prodding NATO countries to set a new target of investing 5 percent of GDP for defense and related expenses by 2035. Pentagon spokesman Sean Parnell has also called on U.S. allies in Asia to pursue defense goals equivalent to those of NATO members. According to a diplomatic source, Washington has already asked Japan to spend 3.5 percent of its GDP on defense. Securing sufficient financial resources to disburse such a large amount could be a tough task if the upper house election weakens the Ishiba government, as his ruling coalition is on the verge of losing its majority in the chamber. Hirohito Ogi, a senior research fellow at the Institute of Geoeconomics at the International House of Japan, said the prime minister's limited influence could make Finance Ministry bureaucrats hesitant to cooperate in increasing defense spending. If the political leader has a solid foundation, the ministry in charge of the national budget would have no choice but to cooperate, Ogi said, adding prospects for future defense spending "depend on whether the Prime Minister's Office is strong or not." © KYODO
