Japan daily brief, Oct 22, 2026: Nikkei sinks 2.7% on chip selloff

Key takeaways

• The Nikkei 225 today fell 1,713.40 points, or 2.65%, to 62,907.84 on Thursday, October 22, 2026. It closed at the day's low and below 63,000 for the first time since July 30, according to Kyodo News and Traders Web.
• The broader TOPIX lost 46.23 points, or 1.14%, to 3,997.50, so the selling was concentrated in heavyweight chip and AI stocks rather than spread evenly across the market.
• Advantest and Tokyo Electron alone took about 805 points off the Nikkei, according to a Fisco ranking cited by Yahoo! Finance Japan. Tokyo Electron fell 6.51% and SoftBank Group 6.86%, GuruFocus reported.
• The trigger was an after-hours drop of about 6% in US chip-equipment maker Lam Research, even though its results beat forecasts, according to Newsquawk.
• The yen firmed to about 157.15 per dollar, and the 10-year Japanese government bond (JGB) yield eased to about 2.87%–2.88%, its lowest since September 9, according to Traders Web and Reuters.

Session recap

Tokyo opened lower despite gains on Wall Street, briefly turned positive by more than 200 points, then sold off. At the midday break the Nikkei stood at 63,917.43, down 1.09%, according to BigGo Finance. Selling accelerated in the afternoon and the index finished at its low for the day. The tables below show the closing figures, compared with Wednesday's close of 64,621.24.

Yen and bond figures are quotes at the time of the Traders Web closing report (15:52 JST); reports differ by one basis point on the 10-year yield. The Ministry of Finance's constant-maturity 10-year yield was 2.923% on October 21.For the yen's full week, see our dollar index weekly brief.

Breadth was far less one-sided than the 2.65% headline drop suggests: the price-weighted Nikkei is moved much more than the TOPIX by a few expensive chip stocks.

What drove it

Lam Research and the AI chip trade

Lam Research reported adjusted earnings per share of $2.20 against expectations of $2.18, and revenue of $8.22 billion against $8.13 billion, after the US close on October 21, according to Newsquawk. Its shares still fell about 6% in after-hours trade. Tokyo's chip-equipment and materials makers followed: Advantest, Tokyo Electron, Disco, SUMCO and Resonac were among the heaviest decliners, BigGo Finance and Traders Web reported. Traders Web said the selling spread in the afternoon as risk appetite faded.

BigGo Finance also cited worries that rising debt at large US technology firms could slow AI spending, plus profit-taking in chip stocks that had rallied on Wednesday. GuruFocus pointed to doubts about whether AI-sector valuations can be sustained. The move was regional: South Korea's KOSPI fell 3.52%, with SK Hynix down 5.49%, according to TradingKey. See also our South Korea daily brief.

A firmer yen

The yen was near 157.90 per dollar in the morning, according to BigGo Finance, and strengthened to around 157.2 in the afternoon, which Wealth Advisor said weighed on stocks. A stronger yen shrinks exporters' overseas earnings in yen terms. Newsquawk reported that the dollar fell 0.5% against the yen after Japan's top currency official, Atsushi Mimura, said he was not satisfied with recent yen moves. See our forex daily brief for background on the dollar.

Cybersecurity stocks and the PHP flaw

Not everything fell. HENNGE, Trend Micro, Shift and other security-related stocks rose after a serious vulnerability was disclosed in PHP, a programming language used by a large share of websites, according to BigGo Finance and Wealth Advisor. Our explainer on PHP emergency security patches covers the details.

Oil, energy shares and safe havens

December Brent crude traded at $111.37 a barrel, up 2.34%, at the time of Investing.com's closing report, after reports of Iranian missile launches toward the Strait of Hormuz, according to Newsquawk. Oil explorers INPEX and Japan Petroleum Exploration rose, as did insurers, Wealth Advisor reported (see our oil daily brief). Bonds drew safe-haven demand linked to the Middle East, France's deficit and equity swings, Reuters reported.

Political & policy watch

Bank of Japan

The BoJ's policy rate is 1.25% after a September hike. Its next meeting runs October 29–30, with a quarterly Outlook Report on October 30, according to the BoJ schedule. Reuters reported, citing sources, that the bank is likely to hold unless the yen weakens again. Markets price about a 60% chance of a quarter-point hike by the December 17–18 meeting, Reuters reported. Yuki Matsuda of Mizuho Securities told Reuters that large moves in rate-hike expectations were hard to imagine before next week's meeting. September data later showed Japan core CPI at 2.1%, above the BoJ's 2% target.

Yen, fiscal policy and geopolitics

Mimura's remarks keep official concern about the yen in view; no intervention has been reported. Yesterday's Japan daily brief covered the Takaichi government's fiscal plans. Abroad, the New York Times reported, citing sources, that the US and Israel have plans for renewed strikes on Iran after the US midterms, per Newsquawk's summary; neither government has confirmed this.

What to watch next

• October 23, 08:30 JST (October 22, 23:30 UTC): Japan's national consumer price index for September, from the Statistics Bureau.
• October 27–28: US Federal Reserve policy meeting. Governor Christopher Waller said further hikes are likely needed, according to Newsquawk.
• Around October 28 and October 30: Advantest and Tokyo Electron results, according to third-party calendars such as Earnings Whispers; dates are not company-confirmed.
• October 29–30: Bank of Japan meeting; decision and Outlook Report on October 30.
• November 3: US midterm elections.
• December 8–9 and December 17–18: next Fed and BoJ meetings.

Next session: our Japan stocks brief for Oct. 23.

Risk checklist for readers

• Index construction matters. A few price-weighted heavyweights can drive the Nikkei 225; comparing it with the TOPIX shows how broad a move is.
• Earnings reactions are about expectations. Lam Research beat forecasts and still fell. Markets often react to guidance and to what was already priced in, not only to headline results.
• Currency risk. For investors outside Japan, returns depend on USD/JPY as well as share prices. Official comments on the yen can move it quickly.
• Central bank days. The Fed and BoJ decide within three days of each other next week. Bonds, the yen and stocks can move sharply around those announcements.
• Geopolitical headlines. Middle East news can move oil and energy shares quickly, and early reports are often revised.
• Check primary data. JPX, Nikkei Inc., the Statistics Bureau and the BoJ publish official figures; use them to confirm numbers quoted elsewhere.

Sources

• Kyodo News via Yahoo! News Japan: Tokyo stocks close 1,713 yen lower
• Traders Web via Yahoo! Finance Japan: Closing overview, October 22
• Wealth Advisor via Yahoo! Finance Japan: Nikkei falls 1,713 yen, below 63,000
• Zaikei: Nikkei close, October 22
• BigGo Finance: Nikkei falls 703 yen in morning session after Lam Research
• TradingKey: Japan and South Korea stocks slump
• GuruFocus: Nikkei 225 falls 2.65%
• Investing.com: Japan stocks lower at close of trade
• Bloomberg: TOPIX quote
• Reuters via Rallies: JGB yields touch multiweek lows
• Newsquawk: APAC stocks mostly lower as AI and chip names come under pressure
• Reuters via AOL: Bank of Japan may raise inflation forecast, stand pat on rates
• Ministry of Finance Japan: JGB interest rates (constant maturity)
• Bank of Japan: Monetary Policy Meeting schedule
• Federal Reserve: FOMC meeting calendar
• Statistics Bureau of Japan: CPI release schedule
• Earnings Whispers: Advantest earnings date

This article is for information only and is not investment advice.