Nikkei 225 Rebounds After Steepest Weekly Decline in Year

The Nikkei 225 index rose on Tuesday, July 21, 2026, gaining between 1.25% and 1.37% to reach approximately 65,000 points. This rebound followed the index's steepest weekly decline in over a year, during which it slid 6.4%, including a two-session plummet of more than 4,600 points. Investors engaged in bargain buying after a market holiday for Marine Day, reversing previous heavy losses in the technology, automobile, and financial sectors.

Market volatility was driven by an escalating military conflict between the United States and Iran, which pushed crude oil prices higher and raised inflation concerns. Despite mutual attacks, both nations reportedly appeared ready to renew diplomatic efforts to halt the hostilities. The downturn in Japan also coincided with a soft lead from Wall Street, where the Dow, S&P 500, and Nasdaq all finished lower on Monday.

Tuesday's recovery was led by exporters and financials, with significant gains for Kioxia Holdings, Shiseido, and IHI. Conversely, Nintendo recorded the largest decline of the session. Investors are now shifting focus toward second-quarter earnings from major U.S. technology firms, including Alphabet, Tesla, and Intel, to assess the outlook for artificial intelligence-related stocks.