Japan Nikkei dips 0.34% to 62,693: AI selloff eases late (Oct 23)

Key takeaways

• The Nikkei 225 today fell 214.68 points, or 0.34%, to 62,693.16 on Friday, October 23, 2026, a second straight decline and its lowest close in about three months, according to Fisco and Nomura Securities.
• The index was down as much as 1,445.23 points at a low of 61,462.61 in the morning before dip-buying in chip stocks cut the loss, according to Yahoo Finance data and Investing.com.
• The broader TOPIX fell 31.69 points, or 0.79%, to 3,965.81. Decliners made up 61.2% of Prime Market stocks, Fisco reported.
• The trigger was an overnight US tech selloff after Meta and Tesla results revived doubts about the payoff from heavy AI spending; the Nasdaq fell 2.6% and the Philadelphia Semiconductor Index 6.7%, Nomura reported.
• The 10-year Japanese government bond (JGB) yield fell 8.5 basis points to 2.795%, its fifth straight decline, Reuters reported. USD/JPY was 157.00 at the Tokyo close, down 0.08%.

Session recap

Tokyo opened 240.79 points lower at 62,667.05 and the selling deepened through the morning. At the midday break the Nikkei stood at 61,825.26, down 1,082.58, according to Fisco via Zaikei. In the afternoon, bargain hunting in semiconductor names pulled the index most of the way back. The table compares Friday's close with Thursday's close of 62,907.84 (Nikkei) and 3,997.50 (TOPIX).

The 10-year yield is the Reuters closing figure for the Tokyo bond session, which ends at 15:00 JST (06:00 UTC); the prior level of 2.880% is implied by Reuters' 8.5 basis-point change. The Ministry of Finance's constant-maturity series, a different calculation, showed 2.914% on October 22. USD/JPY figures are Yahoo Finance five-minute quotes at the Tokyo equity close.

Trading value of nearly ¥9 trillion, well above Thursday's level reported in our October 22 Japan daily brief, shows heavy two-way trade. Real estate, retail and fishery stocks rose, while banks, marine transport and nonferrous metals fell, Fisco reported.

What drove it

AI spending doubts after Meta and Tesla results

On Thursday in New York, the Nasdaq Composite fell 2.6% and the Philadelphia Semiconductor Index dropped 6.7%, according to Nomura Securities. Fisco said results from Meta Platforms and Tesla reignited concern about whether large AI investments will pay off. Nomura added that Meta's free cash flow turned negative in the July–September quarter, raising worries about the financial strain of AI spending (see why the Nasdaq fell on AI spending worries). For the US side of the move, see our US stocks daily brief.

Tokyo's price-weighted chip heavyweights took the first hit. At the midday break, Advantest alone had taken 293.42 points off the Nikkei, SoftBank Group 212.78 and Tokyo Electron 176.98, according to a Fisco contribution ranking published by Zaikei.

The afternoon rebound in chip stocks

Buyers stepped in later. Advantest closed at ¥32,340, down only 0.09% after trading as low as ¥30,030, and Tokyo Electron finished up 0.08%, Investing.com reported. Kioxia rose 1.27% to ¥12,755 and SoftBank Group cut its loss to 0.67%, according to TradingKey. Disco still fell 3.79%. Nomura cited buying near the Nikkei's 200-day moving average, around 61,400, and expectations of upward earnings revisions as reasons the decline narrowed. At the close, TDK and Nitto Denko together subtracted about 102 points, Fisco reported.

Domestic-demand stocks and Fast Retailing

Fast Retailing was the biggest support, adding 199.84 points by midday as its shares rose ¥2,470 to ¥77,170, Fisco data show. Chugai Pharmaceutical, Sony Group and Ryohin Keikaku also gained. Nomura said a firmer yen pushed money into domestic-demand names such as retailers and food makers.

Falling yields hit banks, lift property

A sharp fall in US long-term interest rates weighed on Japanese banks, OANDA Japan reported, while lower yields supported real estate shares. Sumitomo Forestry, which sells homes in the United States, jumped. In Japan, the 10-year JGB yield touched 2.755% intraday, its lowest since late July, according to Nomura. Takayuki Miyajima of Sony Financial Group told Reuters that investors "tend to buy them when risk aversion rises."

Oil, the yen and regional markets

Higher crude prices linked to Middle East tensions added to caution, Fisco said. USD/JPY traded in the low 156 range in the morning and was near 157.10 after 4 p.m. Tokyo time, Investing.com reported. Across the region, South Korea's KOSPI rose 0.30% to 5,550.30 as SK Hynix gained 4.74%, TradingKey reported; see our China and Hong Kong daily brief for Greater China.

Political & policy watch

Bank of Japan and inflation

Core consumer prices rose 2.1% in September from a year earlier, up from 1.7% in August, Reuters reported. The Bank of Japan, which raised its policy rate to 1.25% in September, is widely expected to hold at next week's meeting, with markets pricing the next hike as early as December, according to Reuters. Economy Minister Minoru Kiuchi said Japan is "not yet in a position to officially declare an end to deflation," Reuters reported.

US politics and AI regulation

Nomura said some investors worry that a strong Democratic result in the November 3 US midterm elections could bring tighter rules on AI data centers. That is an investor concern cited by the broker, not an announced policy. Track all of our Asia market coverage on the markets dashboard.

What to watch next

• October 27–28: US Federal Reserve policy meeting, per the Fed's calendar; the decision follows on October 28.
• Late October: Advantest and Tokyo Electron quarterly results, according to third-party calendars such as Earnings Whispers; dates are not company-confirmed.
• October 29–30: Bank of Japan Monetary Policy Meeting; decision and quarterly Outlook Report on October 30, per the BoJ schedule.
• November 3: US midterm elections.
• December 17–18: following BoJ meeting, where Reuters says markets see a possible hike.

Risk checklist for readers

• Closing levels can hide intraday swings. A 0.34% fall masked a 1,445-point drop earlier in the day. The high and low show how volatile a session really was.
• Index construction matters. The Nikkei 225 is price-weighted, so a few expensive stocks such as Advantest and Fast Retailing can move it more than the broader TOPIX.
• Overseas earnings travel. Results from US technology companies often move Tokyo chip stocks the next morning, before local news is known.
• Currency risk. For investors outside Japan, returns depend on USD/JPY as well as share prices.
• Central bank week. The Fed and the BoJ decide within days of each other, and bonds, the yen and stocks can move sharply around those announcements.
• Check primary data. JPX, Nikkei Inc., the Ministry of Finance and the BoJ publish official figures; use them to confirm numbers quoted elsewhere.

Sources

• Fisco via Zaikei: Nikkei extends decline, losses narrow late (Oct 23 close)
• Zaikei: Nikkei close, down 214.68 at 62,693.16
• Fisco via Zaikei: Morning session contribution ranking
• Fisco via Yahoo! Finance Japan: Market overview, October 23
• Nomura Securities: Tokyo Stock Exchange market report
• Investing.com Japan: Nikkei recovers from 1,400-point drop
• OANDA Japan: Nikkei summary, morning of October 23
• Yahoo Finance: Nikkei 225 (^N225) quote and chart
• Yahoo Finance: USD/JPY (JPY=X) quote and chart
• Reuters via Rallies: Benchmark JGB yields hit 2-month lows as tech selloff spurs safe-haven demand
• Trading Economics: Japan 10-year government bond yield
• Ministry of Finance Japan: JGB interest rates (constant maturity)
• TradingKey: Japan, South Korea stocks close mixed
• Bank of Japan: Monetary Policy Meeting schedule
• Federal Reserve: FOMC meeting calendar
• Earnings Whispers: Advantest earnings date

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