The Japanese market is trading sharply higher on Friday, reversing the losses in the previous session, following the broadly positive cues from Wall Street overnight. The Nikkei 225 is moving up to near the 65,800 level, with gains across most sectors led by index heavyweights and financial stocks.
The benchmark Nikkei 225 Index is up 1,099.99 points or 1.70 percent to 65,793.11, after touching a high of 65,041.83 earlier. Japanese shares ended notably lower on Thursday.
Market heavyweight SoftBank Group is surging almost 6 percent and Uniqlo operator Fast Retailing is gaining more than 2 percent. Among automakers, Toyota is gaining more than 1 percent and Honda is edging up 0.2 percent.
In the tech space, Screen Holdings and Tokyo Electron are edging up 0.4 to 0.5 percent each, while Advantest is edging down 0.3 percent.
In the banking sector, Sumitomo Mitsui Financial is adding almost 1 percent, Mitsubishi UFJ Financial is gaining more than 1 percent and Mizuho Financial is advancing almost 2 percent.
Among the major exporters, Panasonic is advancing almost 2 percent, Canon is gaining more than 1 percent and Sony is edging up 0.5 percent, while Mitsubishi Electric is losing more than 1 percent.
Among other major gainers, Sumco is soaring almost 14 percent, while Murata Manufacturing and Taiyo Yuden are jumping more than 7 percent each. Keyence is surging almost 7 percent and BayCurrent is advancing almost 6 percent, while TDK, SHIFT, Taiheiyo Cement, Kyocera and Minebea Mitsumi are gaining more than 5 percent each. Renesas Electronics is adding almost 5 percent, while Trend Micro, Tokai Carbon and Ibiden are rising more than 4 percent each.
Conversely, Fujikura is declining tumbling 6 percent, Alps Alpine is declining more than 5 percent and Furukawa Electric is losing more than 3 percent, while Obayashi, ARCHION and Disco are down almost 3 percent each.
In economic news, retail sales in Japan grew 2.1 percent on year in April 2026, following a downwardly revised 1.4 percent rise in the previous month, surpassing market expectations for a 1.3 percent gain. On a monthly basis, retail trade grew 1.3 percent, following a downwardly revised 1.0 percent gain in March, and marking the fastest increase in three months.
Industrial production in Japan was up a seasonally adjusted 0.8 percent on month in April, beating forecasts for a decline of 0.4 percent, which would have been unchanged from the March reading. On a yearly basis, industrial output was up 2.3 percent. According to the survey, production is expected to rise 5.1 percent on month in May and fall 0.4 percent in June.
Japan's unemployment rate fell to 2.5 percent in April 2026, below both market expectations and March's 2.7 percent reading. The number of unemployed decreased 70K to an eight-month low of 1.79 million. Meantime, employment jumped by 610K to a record high of 68.76 million, while the labor force increased 53K to a record 70.55 million. On a non-seasonally adjusted basis, the labor force participation rate was up to 64.4 percent from 63.6 percent in March and 63.7 percent a year earlier. Simultaneously, the jobs-to-applicants ratio held steady at 1.18, in line with forecasts.
Core consumer prices in Tokyo's central wards rose 1.3 percent on year in May 2026, slowing from 1.5 percent in the previous month and coming in softer than market expectations of 1.5 percent. The reading marked the slowest pace since March 2022.
In the currency market, the U.S. dollar is trading in the lower 159 yen-range on Friday.
On Wall Street, stocks moved to the downside in early trading on Thursday but showed a significant turnaround over the course of the session. The major averages climbed well off their lows of the session and into positive territory, with the tech-heavy Nasdaq leading the rebound.
The major averages once again finished the day at new record closing highs. The Nasdaq advanced 242.74 points or 0.9 percent to 26,917.47, the S&P 500 climbed 43.27 points or 0.6 percent to 7,563.63 and the Dow inched up 24.69 points or 0.1 percent to 50,668.97.
Meanwhile, the major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid 0.8 percent, the German DAX Index fell by 0.3 percent and the French CAC 40 Index dipped by 0.2 percent.
Crude oil prices handed back most of their early gains on Thursday after reports of the understanding between the U.S. and Iran. After surging as much as $3.84 or 4.3 percent to a high of $92.52 a barrel, crude for July delivery ended up $0.32 or 0.4 percent at $89 a barrel.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.