Overview

• The Nikkei 225 climbed 254.29 yen in the August 5 morning session to 40,544.99, recovering from a more than 900-yen drop two days earlier.
• Disappointing US July nonfarm payrolls and downward revisions for May and June fueled speculation that the Federal Reserve could cut rates as early as September.
• A sharp yen appreciation, which saw the currency strengthen by more than 2.8 yen against the dollar, continues to pressure export-oriented and financial stocks.
• New York stocks rallied with a 585-point Dow gain on August 4, setting the stage for Tokyo’s bounce on renewed risk appetite.
• Market sentiment remains fragile as investors weigh the narrowing US-Japan interest-rate gap and potential impacts of US tariffs on Japanese exporters.