In July, the Japanese equity market saw significant fluctuations. At the start of the month the Nikkei 225 and TOPIX indices reached new historic highs riding the wave of the weak yen and strong US markets but ultimately ended the month in negative territory, dropping by 1.2% and 0.5% respectively. In terms of the TOPIX, downward movement was driven by a drop in the TOPIX 100 large cap index while small caps in the TOPIX Small remained flat and mid caps in the TOPIX Mid400 saw gains. Alongside a tumultuous political and economic environment in the US as the election hots up and US stock indices falling back from historic highs earlier in the month there have also been significant movements in the Japanese economic sphere. The 31st of July saw the Bank of Japan raise its policy rate from 0-0.1% to 0.25%. Following this, the yen surged to the 149 yen to the dollar level, a sharp increase from the 38 year low of 161.7 yen/dollar that was seen at the start of the month. 

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