Nikkei 225 Falls 1.79% on Nov 5, 2026 as Chip Stocks Slump

Key takeaways

• The Nikkei 225 fell 1.79%, or 1,110.73 points, to 61,077.90 at the close (06:30 UTC) on Thursday, Nov 5, 2026, according to Jiji Press and Yahoo Finance data.
• The broader TOPIX rose 1.16%, or 45.01 points, to 3,940.39 at the 06:30 UTC close, as money rotated out of AI and chip shares into sectors such as retail and real estate, according to a Reuters report carried by Business Recorder.
• Advantest fell 14.71%, Lasertec 14.21%, Kioxia Holdings 13.14%, Tokyo Electron 9.42% and SoftBank Group 6.77%, based on Yahoo Finance closing data.
• Toyota Motor jumped 16.68% to 3,533 yen after reporting July-September operating income of 1.127 trillion yen and raising its full-year forecast to 3.9 trillion yen, Investing.com reported.
• USD/JPY stood at 157.96 at 06:30 UTC, down 0.23% from the previous close, and the 10-year JGB yield was 2.770%, down from 2.819%, per Investing.com daily data.

Session recap

Tokyo's two main indexes moved in opposite directions on Nov 5, 2026. The price-weighted Nikkei 225 posted its fourth straight daily decline, based on Yahoo Finance closes, while the TOPIX, which covers a much wider set of Prime Market shares, rebounded. For other regional sessions, see Asian and global market closes; the previous Tokyo session is covered in our Nov 4 Japan brief.

The split came down to index construction. A handful of high-priced chip names, such as Advantest and Tokyo Electron, carry heavy weights in the Nikkei, so their slump outweighed gains in most other stocks. Our explainer on the Nikkei 225 vs TOPIX covers how the two indexes are built. A Reuters report carried by Business Recorder said that at 01:31 UTC, 168 Nikkei components were higher and 56 lower, and 25 of the Tokyo Stock Exchange's 33 industry groups were up.

Notes: changes for the Nikkei and TOPIX are against the Nov 4 closes of 62,188.63 and 3,895.38. The USD/JPY change is against Yahoo Finance's previous close of 158.33. The JGB row uses Investing.com daily data retrieved at 09:30 UTC; the change is against 2.819% on Nov 4, and the % column shows the relative change in the yield. Jiji Press quoted the dollar at 158.18-20 yen at 5 p.m. Tokyo time (08:00 UTC).

The Nikkei opened higher at 62,384.73 and reached 62,653.98 before turning lower, Yahoo Finance data show. Since its Oct 29 close of 64,659.47, the index has lost 3,581.57 points, or 5.54%.

What drove it

Chip and AI shares extended their sell-off

Japan's chip and AI-related shares fell for a second session after a steep slide on Nov 4. Investing.com, in a report republished by Yahoo Finance, linked the move to disappointing results from Qualcomm and Arm Holdings and said the Philadelphia Semiconductor Index fell 3.1% overnight to a six-month low. Yahoo Finance data show the index closed at 10,268.65 on Nov 4, down 3.13%. A Reuters report carried by Business Recorder cited bets that the Democrats' gains in the U.S. midterm elections would slow AI data-center expansion.

"Funds that had previously been flowing into AI and semiconductors have shifted to other sectors," Wataru Akiyama, equities strategist at Nomura Securities, said, according to Reuters. He added that "it is unlikely that the trend in data-centre construction will be reversed" over the longer term.

By the close, Advantest had dropped 14.71% to 29,485 yen, Tokyo Electron 9.42% to 8,753 yen, Renesas Electronics 6.72% to 2,628.5 yen and SoftBank Group 6.77% to 3,980 yen, according to Yahoo Finance. Memory maker Kioxia fell 13.14% to 9,324 yen, extending a decline that began on Nov 2.

Toyota led a rotation into blue chips

Toyota Motor rose 16.68% to 3,533 yen. Investing.com reported that the carmaker's July-September operating income rose to 1.127 trillion yen from 839.5 billion yen a year earlier, above a Reuters estimate of 992 billion yen. Toyota raised its full-year operating profit forecast to 3.9 trillion yen from 3.4 trillion yen and lifted its buyback limit to 1.3 trillion yen from 1.0 trillion yen. Net profit for the quarter fell to 759.4 billion yen from 932.0 billion yen, and Toyota trimmed its revenue and vehicle sales guidance.

Other large caps also gained. Fast Retailing rose 4.72% to 81,020 yen, Mitsubishi UFJ Financial Group 2.65% to 3,449 yen and Mitsubishi Corp 2.45% to 5,274 yen, Yahoo Finance data show. The Reuters report carried by Business Recorder said real estate, retail and pharmaceuticals were among the strongest sectors in the morning, while shipping was the weakest.

Lower oil prices and a strong Wall Street session

January Brent crude futures settled 8.7% lower at $94.62 a barrel on Wednesday, Nov 4, and U.S. WTI fell 8.3% to $88.12, Investing.com reported. The Reuters report carried by Business Recorder tied the drop to hopes that the Democratic sweep would weaken President Trump's position and hasten an end to the Iran war, and noted that cheaper crude generally helps Japan, which imports nearly all of its energy. On Wall Street on Nov 4, the Dow Jones Industrial Average rose 3.03% to 53,356.12, the S&P 500 gained 1.58% to 7,688.62 and the Nasdaq Composite added 1.44% to 25,736.51, based on Yahoo Finance data.

Regional chip rout

South Korea's KOSPI fell 5.28% to 5,383.80, based on Yahoo Finance data, a figure that matches CNBC. Investing.com reported that the index triggered a sell-side trading curb during the session, with Samsung Electronics and SK Hynix both falling sharply.

Political & policy watch

• U.S. Congress: CNBC said Asian investors were weighing a sweeping Democratic victory in the midterms, with worries about tighter data-center rules. The Reuters report carried by Business Recorder said investors were betting the result would slow AI data-center expansion. No specific legislation was cited in the reports reviewed.
• Middle East and oil: The Reuters report carried by Business Recorder said lower crude reflected hopes of an end to the Iran war; it also said shipping shares fell on prospects of lower freight rates if the conflict eases. No settlement had been confirmed in the reports reviewed.
• Bank of Japan: The BOJ's schedule lists the Summary of Opinions from its Oct 29-30 meeting for Nov 10 and its next Monetary Policy Meeting for Dec 17-18.
• Yields: The 10-year JGB yield eased to 2.770% from 2.819%, Investing.com data show, while Investing.com reported that U.S. Treasury yields also declined.

What to watch next

For how the U.S. election result reaches Southeast Asian assets, see our analysis of U.S. midterm results and ASEAN markets.

Risk checklist for readers

• The Nikkei 225 and TOPIX can move in opposite directions. On Nov 5 the Nikkei fell 1.79% while the TOPIX rose 1.16%, so a single index can give a misleading picture of the whole market.
• Sector rotation can be abrupt. Shares that led earlier gains, such as chip equipment makers, can fall by double digits in a session when expectations change.
• Earnings days bring large single-stock moves. Compare reported figures, guidance changes and buybacks with the company's own filings, not only headlines.
• Oil prices matter for Japan, which imports nearly all its energy. Sharp moves in crude can shift sentiment across importers, shippers and trading houses.
• For foreign investors, returns on Japanese shares also depend on the yen. A move of a few tenths of a percent in USD/JPY can offset or add to a stock's gain or loss.
• Reports during the session often differ from closing figures. Check closing data from Japan Exchange Group or a primary data provider before drawing conclusions.

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