Rising Rates Lift Cost of Capital, Pressuring Japanese Equities

Equities

JAPEX, Mebuki Financial boost ROE targets, looking to buck trend

The Nikkei Stock Average has seen increased volatility since reaching a record high on June 25. (Photo by Jumpei Kinefuchi)

AKIRA INUJIMA

September 1, 2026 06:18 JST

TOKYO — Climbing interest rates have weighed on Japanese equities in recent weeks by driving up corporate cost of capital and the returns demanded by investors, compounding the volatility triggered by sharp swings in artificial intelligence-related stocks.

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