The benchmark Nikkei 225 index on the Tokyo Stock Exchange experienced a notable increase of 2.33%, closing at 58,775.50 points. This rise partially offsets a significant 6% decline observed on Friday, which had resulted in the index entering bear market territory, defined as being more than 20% below its record high established in June. The broader Topix index experienced an increase of 2.97%, reaching 3,818.16 points. This rally extended to 208 of its 225 constituents, with only 17 showing a decline. The improvement followed a recovery in technology stocks on Friday, as Nvidia and TSLA rose after steep losses earlier in the week. The tech-heavy Nasdaq experienced an increase of 1.1%, while the S&P 500 saw a rise of 0.3%.
The market attributed the rebound to a reduction in apprehensions that Democratic Party gains in the midterm congressional elections could result in stricter regulations on the artificial intelligence sector and limit expenditures on data centers. However, analysts contend that this support may exert a constrained influence. Takuma Ikemoto, a market analyst at Tokai Tokyo Intelligence Lab, noted that: “There are significant concerns about policy changes in the United States, such as the issuance of AI regulations, and once the initial buying wave ends, it may be difficult to continue posting gains.” In the realm of energy markets, U.S. President Donald Trump stated on Sunday that the probability of initiating new attacks on Iran remains minimal, contingent upon the ongoing Qatar-mediated negotiations, notwithstanding reports from both parties regarding vessels being targeted in or near the Strait of Hormuz.
The eight-month-old conflict has significantly disrupted energy flows throughout the region. Among individual stocks, Bain & Company recorded the most significant percentage increase on the Nikkei, climbing 8.8% to achieve its highest closing level on record. Shimizu achieved a second-place finish with a gain of 7.7%, whereas Mitsubishi Electric recorded an increase of 7.3%. On the downside, Japan Tobacco led the decliners after experiencing a drop to the maximum daily limit for the second consecutive session, following the seizure of its assets in Russia. The stock declined by 15.95%, reaching its lowest closing level since October 2025.
Mitsui Chemicals experienced a decline of 8.48%, marking its lowest closing value since June 2025, while Tokyo Foodsan Holdings saw a decrease of 4.45%. Traders in the Japanese market are closely monitoring the extent of the current rebound to determine if it can adequately restore confidence following the tech-led selloff, with the Nikkei still positioned beneath its June record high. Attention is directed toward advancements in U.S. regulatory policy concerning artificial intelligence and the path of energy prices in the context of ongoing regional tensions. CAC 40 advances amid corporate developments and declining oil prices.
