Nikkei 225 Falls 0.80% on Oct 26, 2026 as Chip Stocks Slide

Key takeaways

• The Nikkei 225 fell 503.51 points, or 0.80%, to 62,189.65 on Monday, October 26, 2026, its third straight decline and lowest close since July 30, according to Reuters and IBTimes.
• The broader TOPIX rose 7.17 points, or 0.18%, to 3,972.98, and gainers outnumbered losers in the Nikkei 149 to 73, Reuters reported, a sign the selling was concentrated in a few heavyweights.
• Chip stocks led the decline: Screen Holdings fell 4.34% and Kokusai Electric 4.29%, while Advantest and Tokyo Electron together took about 420 points off the index in morning trade, according to Reuters and IBTimes.
• Energy shares rose with oil prices; Inpex gained 4.90% after Brent crude climbed about 6% last week, according to Reuters and IBTimes.
• USD/JPY was 156.98 at the Tokyo close, down 0.01%, per Yahoo Finance, and the 10-year Japanese government bond (JGB) yield edged up to 2.810%, Finimize reported.

Session recap

Tokyo opened lower at 62,449.96, traded as high as 62,902.95 and as low as 62,094.34 before closing at 62,189.65, according to Yahoo Finance data. The split between a falling Nikkei and a rising TOPIX was the story of the day. For the wider region, see Asian and global markets today; for Friday's session, see our October 23 Japan daily brief. The table compares Monday's Tokyo close with Friday's close of 62,693.16 (Nikkei) and 3,965.81 (TOPIX).

The 10-year yield is the session level reported by Finimize, compared with Reuters' October 23 close of 2.795%; 06:00 UTC is the end of the Tokyo bond session. Trading Economics, which uses a different data feed, showed 2.785% on October 26. The Ministry of Finance's constant-maturity series showed 2.837% for October 23. USD/JPY figures are Yahoo Finance five-minute quotes at the Tokyo equity close.

What drove it

Chip and AI stocks extend their slide

Concerns that companies are overinvesting in artificial intelligence have weighed on chip stocks around the world for weeks, IBTimes reported, and Monday was another example. In morning trade, Advantest took about 222 points off the Nikkei and Tokyo Electron about 198 points, according to IBTimes. By the close, Screen Holdings had fallen 4.34% and Kokusai Electric 4.29%, Reuters reported, while Sumco dropped about 4%, according to IBTimes. Memory maker Kioxia fell 1.61% to ¥12,550, TradingKey reported, which described the move as continued deleveraging after Friday's slump.

The lead came from New York, where the S&P 500 fell 0.5% and the Dow Jones Industrial Average 1.2% on Friday, according to IBTimes. SoftBank Group bucked the chip trend with a 0.21% gain to ¥4,285, per TradingKey.

Why the TOPIX rose while the Nikkei fell

The Nikkei 225 is weighted by share price, so a handful of expensive chip and retail stocks can outweigh dozens of smaller gains. The TOPIX is weighted by market value across a much broader set of companies. On Monday, 149 Nikkei members rose and only 73 fell, Reuters reported, yet the index lost 0.80% because the heaviest names dropped. Fast Retailing was also a drag, IBTimes said. Our explainer on the difference between the Nikkei 225 and TOPIX covers how the two indexes are built.

Oil and energy shares

Brent crude rose about 6% last week to its highest level since April after Houthi attacks on Saudi Arabia, attacks on shipping in the Strait of Hormuz and reports of possible renewed strikes on Iran, according to IBTimes. Oil eased more than 1% on Monday after reports that Qatari mediators had visited Tehran. Energy names still gained: Inpex rose 4.90%, Reuters reported, and JGC Holdings about 4.6%, according to IBTimes. Trading houses Mitsubishi Corp., Toyota Tsusho and Itochu were among the biggest positive contributors to the index. For background, see how oil price shocks hit inflation and rates.

Banks gain as yields edge up

Banks and insurers rose on higher Japanese interest rates, IBTimes reported. The 10-year JGB yield rose to 2.810%, a small rebound after its biggest weekly drop since April 2025, according to Finimize, while the 2-year yield, the maturity most sensitive to rate expectations, stood at 1.885%.

Company news: GMO Internet Group

GMO Internet Group plunged 15.65% after saying it would compensate customers for losses from unauthorised access to a service linked to foreign exchange trading, Reuters reported. On October 21 the company disclosed unauthorised access to its "Onamae.com Desktop Cloud" service, which is often used to run automated FX trading tools, with up to 26,739 servers potentially affected, ASCII reported. Mercari also fell 6.21%, per Reuters; a specific cause was not reported.

Analyst views and the yen

Satoshi Saito, senior analyst at Monex Securities, said the Nikkei "is showing signs of short-term technical undervaluation," IBTimes reported. Jun Morita, head of research at Chibagin Asset Management, expects no surprises from this week's central bank meetings and sees technology earnings as the likelier source of turbulence, according to the same report. The yen was little changed, with the dollar around 156.8 yen in morning trade, IBTimes said. Across the region, the KOSPI fell 1.46% to 5,469.47, TradingKey reported, and Taiwan's benchmark lost nearly 2%, per IBTimes.

Political & policy watch

Bank of Japan and the Federal Reserve

The Bank of Japan, which raised its policy rate to 1.25% in September, meets on October 29–30. Markets largely expect it to hold this month while keeping a December hike in view, according to Finimize. The US Federal Reserve announces its decision on Wednesday, October 28, and markets broadly expect a hold, though some traders are betting on a December hike, IBTimes reported. Read our explainer on the Fed's October rate debate for the US side.

Middle East tensions

Attacks on Saudi Arabia and on shipping near the Strait of Hormuz have pushed oil higher, and reports of mediation by Qatar eased prices on Monday, according to IBTimes. Japan imports most of its crude oil, so energy prices feed directly into its trade balance and inflation.

US elections

US midterm elections take place on November 3. Some Tokyo brokers have cited the result as a possible factor for AI-related regulation, as covered in our previous brief; no policy change has been announced.

What to watch next

• This week: Earnings from Alphabet, Microsoft and Amazon, and US September PCE inflation data, according to IBTimes.
• October 28: Federal Reserve policy decision (statement scheduled for 18:00 UTC), per the Fed's calendar; SK Hynix third-quarter results, according to TradingKey.
• 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.

Risk checklist for readers

• Index construction matters. Monday showed the Nikkei and TOPIX moving in opposite directions; check both before drawing conclusions about the whole market.
• Back-to-back central bank decisions. The Fed and the BoJ decide within days of each other, and yields, the yen and stocks can move sharply around announcements.
• Overseas earnings travel. Results from large US technology companies often move Tokyo chip stocks the following morning.
• Oil and geopolitics. Headlines from the Middle East can swing crude prices and, with them, Japanese energy and trading-house shares.
• Currency risk. For investors outside Japan, returns depend on USD/JPY as well as share prices.
• Check primary data. JPX, Nikkei Inc., the Ministry of Finance and the BoJ publish official figures; data feeds can differ slightly, as the 10-year yield readings above show.

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