The Tokyo Stock Exchange Growth Market 250 Index rebounded on the morning of July 23. The morning session closed at 700.61, up 4.07 points (0.58%) from the previous day, effectively carrying over the momentum from the prior day’s rally in U.S. technology stocks. While buying initially centered on semiconductor-related issues, the index traded in a narrow range throughout the session, with notable instances where sell orders awaiting a rebound capped upside potential.
Among individual stocks, PowerX, a developer of energy storage systems, and QD Laser, which specializes in semiconductor lasers, posted gains. The buying spilled over from the U.S. market, where the semiconductor and semiconductor manufacturing equipment sector was actively bought the previous day, prompting investors in Japan’s growth market to hunt for related names. On the other hand, Free, a provider of cloud-based human resources and labor management software, and Buysell, a buyer of branded goods, declined, as market participants increasingly differentiated based on earnings expectations and valuations.
In the U.S. stock market on July 22, the Dow Jones Industrial Average closed at 52,224.64, up 385.38 points, while the tech-heavy Nasdaq Composite finished at 25,837.21, a gain of 329.14 points. A recovery in the share prices of artificial intelligence (AI)-related companies and favorable reactions to major corporate earnings reports fueled buying from the opening bell. While crude oil futures and long-term interest rates rose at times after President Trump indicated a policy of continuing and expanding attacks on Iran, the resilience of technology stocks underpinned the broader market.
Against this backdrop of U.S. stock market strength, buybacks flowed into semiconductor-related issues in Japan’s growth market. However, an analyst at a domestic securities firm pointed out that “while buybacks are entering large-cap stocks, capital is struggling to reach small- and mid-cap issues.” The TSE Growth Market 250 Index is currently hovering around the 700 level, but limited risk appetite among investors has prevented the buying from spreading to a wider range of stocks.
Looking at futures market trends, as of July 22, TSE Growth Market 250 Index futures were expected to be “slightly skewed toward sellers.” The view was that while semiconductor-related stocks were rising in the U.S., the increase in crude oil and long-term interest rates would act as headwinds for the growth market. On the daily candlestick chart, the index remains below all major moving averages, with a death cross between the 5-day and 25-day moving averages looming, indicating a technical environment where adjustment pressures are easily recognized. In overnight trading, futures closed at 697 points, up 2 points from the previous business day’s daytime close, with market views setting upside resistance around 705 points and downside support near 685 points.
However, contrary to the previous day’s futures expectations, the cash index recovered the 700-point level and bounced back during the morning session on July 23. Some market participants noted, “Compared to the period when the market was an isolated underperformer, investor sentiment has stabilized, and with no Japan-specific negative catalysts, it is difficult to envision a major sell-off.” The U.S. tech rally was reassessed during Tokyo trading hours, with buybacks centered on semiconductor-related stocks pushing the index higher.
Since the start of 2026, the TSE Growth Market 250 Index has demonstrated resilience around the 700 level while continuing to trade in a boxed range, facing selling pressure on rebounds near 750. Amid a mix of factors including U.S. monetary policy, tech company earnings trends, and geopolitical risks surrounding the Middle East, investors are increasingly selective with individual stocks. Heading into the afternoon session, the focus will be on how far buying interest, particularly in semiconductor-related names, can spread while gauging movements in Asian markets and the direction of foreign exchange rates.
AloJapan.com