Japan in July 2026: the most important developments in economy
In July 2026 Japan's economy was shaped by artificial intelligence investment, with large deals followed by sharp market swings. Mid-month, Japan and Nvidia announced a partnership to build domestic AI infrastructure for robots, with Japan planning to buy Nvidia's Vera Rubin chips and SoftBank, Sony and Honda taking part. Micron began a $9 billion expansion of its Hiroshima plant. Then worries about AI spending hit stocks: the Nikkei fell 2,694 points on July 17, the fifth-largest one-day drop on record, dropped more than 2,000 points on July 24, and lost over 3,000 points on July 28 in a chip sell-off. An earthquake disrupted TSMC's plant in Japan, and operations resumed gradually.
The second theme was the yen. It fell to about 162 per dollar on July 1, a 40-year low, and reached 163 in late July, nearing 165 on July 24. Finance Minister Katayama repeatedly said Japan was ready to act, and Japan said it was in close touch with the US. Government bond yields rose toward 3%. The finance minister urged the public pension fund GPIF to invest more at home, which lifted the yen briefly, but reports that it would not change its allocation pushed the yen down again. On July 30 the yen jumped about 3% to the 157 range, and traders widely speculated that Tokyo had intervened. The Bank of Japan, which raised rates in June, held them steady and signalled the chance of an early further increase. JPMorgan and other US banks are set to help finance Japan's $550 billion US investment plan.
In autos, China's BYD launched an electric minicar on July 28 to compete in Japan's kei car segment. Electric vehicle sales doubled in the first half of the year. Toyota stayed the world's top seller for the seventh year in a row and said it would move truck production from Mexico to Texas, while Honda's large electric car plan collapsed.
Sony said it will stop making PlayStation game discs by 2028.
by WorldBrief & Maksim Micheliov | AI-generated summary
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