JP 225 forecast: the uptrend has shifted to a short-term downtrend
The JP 225 index continues its correction within a downtrend. The JP 225 forecast for today is negative.
JP 225 forecast: key trading points
Recent data: Japan Tokyo CPI for August rose by 2.5% year-on-year
Market impact: this result is positive for the Japanese stock market
Fundamental analysis
Tokyo’s Consumer Price Index (CPI) rose by 2.5% year-on-year in August 2025, in line with forecasts but lower than the previous reading of 2.9%. For the Japanese equity market, this result matters. Easing inflation signals reduced pressure on consumers and businesses, which may act as a positive factor for domestic demand. However, inflation remains above the Bank of Japan’s target (around 2.0%), supporting arguments for a cautious review of monetary policy.
For the JP 225, the sectoral impact is mixed. The consumer sector (retail, restaurants, and everyday goods) benefits from lower inflationary pressure, which supports purchasing power. Export-oriented companies may also gain if expectations of a softer Bank of Japan stance put downward pressure on the yen, improving competitiveness abroad. Conversely, the financial sector may face limits, as slower inflation reduces the likelihood of aggressive interest rate hikes, restraining bank margins.
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