Nikkei rebounds to 66,970 on US job slowdown, Recruit gains

2026-08-10

Nikkei briefly recovers 67,000 level

In Tokyo stock market trading on the 10th, the Nikkei Stock Average rebounded and closed at 66,970.22, up 1,363.51 yen from the previous Friday. At one point, the gain topped 1,400 yen and the index recovered the 67,000 level. US stocks rose the previous Friday on easing expectations for further US rate hikes, and the Nikkei rose above its 25-day moving average. Recruit Holdings, which raised its full-year earnings outlook on the 7th, was also bought up to its daily limit.

Weak US jobs data lends support

In the July US employment report released on the night of the 7th, nonfarm payrolls fell by 23,000 from the previous month, contrary to market expectations for an increase of 83,000. In FedWatch, which prices in monetary policy based on US interest-rate futures, the probability that the US Federal Reserve will keep its policy rate unchanged at its next September meeting rose to nearly 60%, sharply up from about 30% as of July 31.

A slowdown in employment could normally fuel concern about an economic downturn, but the market reaction remains calm. If US long-term rates fall, concerns about the high valuations of AI- and semiconductor-related stocks with elevated PERs would ease. On the US stock market on the 7th, the Philadelphia Semiconductor Index (SOX) rose by more than 2%, and on the Tokyo market on the 10th, Advantest, Tokyo Electron and Ibiden were all bought.

Factors boosting the market

Monex chief strategist Takashi Hiroki sees the combination of a rebound in AI- and semiconductor-related shares and fading expectations for US rate hikes as making it easier for the market to benefit from both sides. The Nikkei moved above its 25-day moving average, around 65,960 yen, which indicates the short-term trend, breaking through a resistance line that had capped highs over the previous Friday through the 7th. Market participants are also looking at the formation of a golden cross, in which the 5-day moving average rises above the 25-day moving average.

Jun Kitazawa, deputy general manager of the investment information section in the commodities department at Miki Securities, said the improvement in chart patterns is lifting investor sentiment. Among the largest contributors to the Nikkei Average, Recruit stood out, lifting the overall index by about 300 yen on its own.

On the 7th, Recruit raised consolidated operating profit for the fiscal year ending March 2027 to 945 billion yen, up 50% from the previous year. That was an upward revision from the previous forecast of 787 billion yen and far above the QUICK consensus of 812 billion yen, based on 15 companies as of the 5th. Keiichi Yashima of Citigroup Securities called it a 'positive surprise'. The stock ended trading at 16,165 yen, up 3,000 yen from the previous Friday, hitting its daily upper limit. It also renewed its all-time high.

Near-term focus is 70,000

In the market, some say the Nikkei's near-term upside target is around 70,000. Earnings from major companies for April-June 2026 were generally firm, and expectations remain for further upward revisions to company plans. The Tokyo market got off to a strong start in the second week of August as it seeks to test higher levels while absorbing short-term profit-taking.

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