FX.co ★ Japanese Shares Set for Strong Weekly Gain

The Nikkei 225 Index climbed 0.7% to above 71,400 on Friday, while the broader Topix Index edged down 0.1% to 4,064 in mixed trading, as investors digested data showing Japan’s core inflation held steady at 1.4% in May. The figure was in line with market expectations and suggested that underlying price pressures remained subdued, despite concerns that higher energy costs could stoke inflation.

Despite the uneven session, both benchmarks were poised for strong weekly gains, with the Nikkei and Topix set to rise more than 8% and 4%, respectively. Sentiment was supported by the implementation of the US–Iran peace agreement, which pushed oil prices lower and helped ease inflation fears.

Japanese equities also benefited from a global rally in semiconductor and artificial intelligence-related shares, which helped counteract the drag from hawkish signals by the US Federal Reserve. Sector-wise, technology stocks mostly advanced on Friday, while financials, industrials, and consumer names were generally weaker.