TOKYO –
Japanese shares prolonged their restoration on October 28, with the Nikkei 225 closing at 63,954.19 at 3:30 p.m. Tokyo time, up 685.82 factors, or 1.08%, from the earlier session, as sturdy demand for synthetic intelligence-related semiconductor shares lifted the benchmark for a second consecutive day, even because the broader market weakened forward of main rate of interest choices in Japan and the United States.
The rally was pushed by a concentrated group of expertise shares, highlighting the rising affect of semiconductor producers and gear suppliers on Japan’s fairness market. The Nikkei briefly climbed above 64,300 throughout afternoon buying and selling, reaching an intraday excessive of 64,308.71 earlier than surrendering some positive factors towards the shut.
The broader TOPIX index moved in the wrong way, falling 0.14% to three,991.71, whereas declining shares outnumbered advancing shares by greater than two to 1 on the Tokyo Stock Exchange’s Prime Market. The divergence illustrated how the energy of a small variety of closely weighted expertise firms was masking weak spot throughout a lot of company Japan.
Semiconductor testing gear maker Advantest made the most important constructive contribution to the Nikkei, including roughly 231 factors to the index, adopted by Tokyo Electron with almost 210 factors and SmoothBank Group with about 168 factors. Memory chip producer Kioxia Holdings surged 13.76%, whereas digital elements producer Ibiden gained 7.94% and chipmaker Renesas Electronics superior 7.47%.
The shopping for adopted positive factors on Wall Street on October 27, when the technology-heavy Nasdaq Composite rose 1.18%, reinforcing expectations that funding in synthetic intelligence infrastructure would proceed supporting demand for Japanese semiconductor gear, reminiscence chips and superior digital elements.
The restoration represented a partial reversal of the losses recorded earlier in October, when Japanese equities retreated sharply from their highs. The Nikkei had closed at 62,189.65 on October 26 earlier than rebounding over the next two classes, though the benchmark remained beneath the degrees reached at the start of the month.
Market weak spot was evident outdoors the expertise sector. Konami Group, Canon and Nitto Denko had been among the many day’s notable decliners, whereas insurance coverage, meals manufacturing and oil-related shares additionally confronted promoting stress. Only 10 of the Tokyo Stock Exchange’s 33 business teams recorded positive factors.
The overseas alternate market remained comparatively secure regardless of the rise in Japanese equities. The yen traded at 157.78 to 157.80 in opposition to the dollar at 5 p.m. Tokyo time, strengthening barely from yesterday. Against the euro, the Japanese foreign money stood at 175.49 to 175.53. Traders had been reluctant to take giant positions forward of the Federal Reserve’s coverage announcement and the Bank of Japan’s two-day financial coverage assembly starting October 29.
The BOJ’s October 29-30 assembly was anticipated to offer recent steerage on the outlook for rates of interest, inflation and financial development. Investors had been significantly targeted on whether or not policymakers would sign additional financial tightening, given persistent value pressures and the consequences of the weaker yen on imported power, meals and industrial supplies. The central financial institution was scheduled to publish its newest financial outlook on October 30, adopted by a news convention.
In one of many day’s most vital company developments, Advantest introduced after the market shut that it had raised its earnings forecast for the fiscal 12 months ending March 2027, reflecting accelerating international demand for semiconductor testing gear utilized in synthetic intelligence functions.
The firm lifted its annual income projection from 1.714 trillion yen to 1.863 trillion yen, a rise of 65.1% from the earlier fiscal 12 months. Its forecast for annual web revenue was raised from 660 billion yen to 741.5 billion yen, representing a projected year-on-year improve of 97.5%.
Advantest reported income of 845.2 billion yen for the six months by September, up 60.5%, whereas web revenue greater than doubled to 368.1 billion yen. The firm additionally introduced a share repurchase program value as much as 280 billion yen, masking as many as 11 million shares, alongside an interim dividend of 49 yen per share.
The outcomes supplied additional proof that the worldwide growth of AI computing infrastructure is creating substantial alternatives for Japanese expertise producers. Demand for superior chip testing methods has elevated as semiconductor producers develop extra highly effective processors and high-bandwidth reminiscence merchandise for AI servers and information facilities. Advantest’s shares climbed 3.16% throughout common buying and selling and rose additional in after-hours transactions following the announcement.
Tokyo Electron Device additionally reported sturdy earnings, doubling its recurring revenue for the April-September interval to 7.35 billion yen. The firm raised its full-year recurring revenue forecast by 17.6% to 16 billion yen, placing it on target for its highest earnings in three years. It additionally elevated its deliberate annual dividend from 129 yen to 151 yen per share.
The earnings upgrades contrasted with continued uncertainty in different components of the company sector. Japanese electrical motor producer Nidec disclosed that it had been unable to submit corrected monetary experiences accompanied by an auditor’s opinion by its October 28 goal date, as investigations into accounting irregularities continued.
The firm stated it meant to submit a report on its inner controls to the Tokyo Stock Exchange on October 30. Nidec has been underneath particular monitoring since October 2025 following disclosures of doubtless inappropriate accounting practices inside the group, and its incapability to safe an audit opinion has raised issues about its continued itemizing.
Beyond company earnings, the federal government’s newest financial evaluation introduced a combined image of Japan’s restoration. In its month-to-month report launched on October 27, the Cabinet Office maintained its evaluation that the financial system was recovering reasonably, supported by enhancing employment and family earnings situations, though it warned that developments within the Middle East remained a major supply of uncertainty.
The authorities downgraded its evaluation of exports, saying the restoration had not too long ago proven indicators of stalling. At the identical time, it upgraded its evaluation of enterprise sentiment, reporting indicators of enchancment throughout firms. Private consumption continued to get well, capital funding remained on an enhancing development, and employment situations confirmed additional indicators of strengthening.
The contrasting indicators underscored the challenges dealing with policymakers. Although main exporters and expertise firms have benefited from abroad demand and the weaker yen, home companies proceed to take care of greater working prices, persistent client value will increase and uneven family spending.
Investors had been additionally watching developments in international commodity markets, the place elevated oil costs remained a possible menace to Japan’s import-dependent financial system. Rising power prices may put renewed stress on family budgets and company profitability, significantly amongst transportation firms, producers and smaller companies with restricted capability to move greater prices on to clients.
Japan’s 10-year authorities bond yield stood at roughly 2.83%, reflecting expectations for financial coverage and inflation. Higher borrowing prices stay an vital consideration for companies planning capital expenditure, in addition to for the federal government, given Japan’s substantial excellent public debt.
The divergence between the Nikkei and TOPIX on October 28 highlighted the more and more uneven nature of Japan’s fairness market. While funding associated to synthetic intelligence is producing distinctive earnings development amongst chosen expertise firms, the broader financial system stays uncovered to weaker export momentum, elevated power prices and uncertainty over rates of interest.
Attention was set to shift to the Bank of Japan’s October 30 coverage announcement and the subsequent spherical of company earnings, with buyers searching for proof that Japan’s stock market restoration may lengthen past semiconductor shares right into a broader vary of industries.