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Japan-US Coordinated Currency Intervention: Largest Ever at ¥15 Trillion, First in 15 Years

Between July 30 and August 26, 2026, Japan and the United States jointly conducted a series of yen-buying, dollar-selling currency interventions. According to the Ministry of Finance, the total came to ¥15.3993 trillion, surpassing the ¥11.7 trillion intervention carried out from April to May of the same year and setting a new all-time record as the largest yen-buying intervention in history.

A coordinated Japan-US intervention of this kind had not taken place in 15 years. The US agreed to participate because it did not want Japan to sell its dollar-denominated assets — specifically US Treasuries — to fund the operation. By stepping in as a partner, the US avoided a scenario in which large-scale Treasury sell-offs could have pressured its own bond market.

That said, history shows that the effects of currency intervention tend to be short-lived. Mabuchi expects the yen's weakness to continue, given ongoing US interest rate dynamics and market concerns about Japan's fiscal spending and potential consumption tax cuts. Currency moves affect industries very differently — export-oriented companies such as automakers often see their share prices dip temporarily when the yen strengthens. She emphasized that individual investors should resist reacting to every swing and instead base their decisions on Japan-US interest rate trends and corporate earnings per share (EPS).

TOPIX Reform: Raising Index Quality by Narrowing Constituents

TOPIX, the broad benchmark closely tracked by institutional investors, has been undergoing a phased reform since 2024. According to a Nikkei Shimbun report dated August 31, 2026, the number of constituent stocks has likely fallen below 1,000.

The old TOPIX was built largely by inheriting companies listed on the Prime Market, which meant it included many small-cap names with thin trading volumes. The reform moves selection criteria away from simply asking which market a company is listed on, toward identifying stocks that are actively and attractively traded in practice. The goal is to raise the overall quality of the index. Narrowing the constituent count is also expected to reduce management costs for index funds and ETFs that track TOPIX, delivering a broad benefit to investors who use the index.

Reading Market Overheating with the NT Ratio

This year, the Nikkei Average — which carries a heavy weighting in semiconductor-related stocks — has frequently grabbed the headlines, while TOPIX performance has often been overshadowed. Because index moves depend heavily on constituent composition, there are days when the Nikkei rises while the majority of individual stocks across the wider market are actually falling.

One useful tool for a bird's-eye view of the market is the NT ratio: the Nikkei Average (N) divided by TOPIX (T). When this ratio climbs, it is a signal that the market may be running hot. A high NT ratio can also serve as a prompt to check whether TOPIX is looking relatively undervalued. Mabuchi also noted that index investing through mutual funds or ETFs benchmarked to a specific index provides broader diversification than investing in individual companies.

23-Hour US Stock Trading and the 2026 Midterm Elections

Starting in December 2026, US stocks will be tradable for 23 hours a day, with only a brief maintenance window each day. This creates a near-continuous market, and the US aims to draw capital from around the world by keeping its markets open almost around the clock. Major IPOs will become easier to access, and US equities are set to become a more familiar and practical option for individual investors. For Japanese investors who previously had to wait until the middle of the night for US markets to open, being able to trade during regular daytime hours is a meaningful shift.

November 2026 also brings US midterm elections, adding another dimension to the outlook for American markets. Historical patterns suggest markets tend to be turbulent in midterm election years — corrections can emerge early in the year, and if interest rates are being raised, volatility may intensify through autumn. That said, post-election clarity has often led to a stock market recovery once uncertainty clears. Mabuchi stressed the importance of monitoring not just the election outcome but the solid earnings performance (EPS) of leading US companies. She also suggested that Japanese investors consider including US equities as one component of their broader portfolio.