Nikkei 225 Battles Near All-Time Highs: BoJ Rate Hike Speculation Clashes with Yen Weakness at 156 Level

"On February 4, 2026, the Tokyo stock market remained firm, with the Nikkei 225 trading near its all-time high in the 51,000 range. Despite the BoJ raising rates to 0.75% at the end of last year, Governor Ueda maintains a hawkish stance, not ruling out further hikes depending on data. This has led to continued inflows into the banking sector, while the yen's depreciation to the 156 level per dollar has boosted profit expectations for exporters like Toyota. Market focus is shifting to the upcoming general election on February 8, where the consistency between the ruling party's fiscal expansion hopes under President Takaichi and the BoJ's tightening policy will likely dictate future market moves."