Core Viewpoint - The Japanese stock market has recently reached historical highs, driven by factors such as lower-than-expected tariffs, a surge in the technology sector, and increased military spending [1][10][14]. Group 1: Market Performance - The Nikkei 225 index closed at approximately 42,718 points on August 12, marking a 2.2% increase and a historical high, while the TOPIX index rose about 1.4% to 3,066-3,067 points [1]. - The Nikkei 225 ETF (513880) has surged nearly 6% over the past seven trading days, with a net value of 1.484 [1]. - Foreign investors have recently turned net sellers of Japanese stocks and futures for the first time in 16 weeks, selling 342 billion yen (approximately 2.3 billion USD) [13]. Group 2: Sector Performance - The technology sector has been a key driver of the recent market rally, with significant gains in semiconductor equipment companies like Advantest and Lasertec, both rising by 6-7% [7]. - SoftBank's stock surged approximately 6.9%, reaching a historical high, amid discussions of its plans to list its payment application PayPay in the U.S. [7]. - The automotive sector, previously impacted by tariff concerns, has shown signs of recovery, with major manufacturers like Mazda and Subaru seeing stock increases of about 4.1% and 3.6%, respectively [10]. Group 3: Economic Factors - The easing of tariff uncertainties has positively impacted the Japanese market, with the U.S. agreeing to lower tariffs on Japanese automobiles and parts to 15% [10]. - The U.S. has also extended the suspension of tariffs on Chinese goods, further alleviating pressure on Japanese exports [10]. - The overall profit outlook for Japanese companies remains cautiously optimistic, with expectations of profit growth despite a slight decline projected for the fiscal year 2025 [14]. Group 4: Future Outlook - Major international investment banks believe the Japanese bull market is not over, although some investors are becoming cautious [13]. - Stock buybacks have been announced by several companies, including Canon and Asahi Group, which could provide additional market momentum [13]. - Goldman Sachs has raised its target for the TOPIX index from 3,000 to 3,200 points, citing clarity in U.S.-Japan trade agreements and rising expectations for U.S. Federal Reserve rate cuts as key drivers [14].