TOKYO - Japan's Nikkei 225 Stock Average closed at 62,188.63 on Wednesday, November 4, 2026, falling 893.23 points, or 1.42%, from the previous trading session as heavy selling in semiconductor and artificial intelligence-related stocks swept through Tokyo markets following the U.S. midterm elections, although a strong afternoon recovery helped the benchmark recover much of its earlier losses.
The Nikkei suffered its third consecutive decline after trading resumed following the November 3 Culture Day holiday. The benchmark opened at 62,973.16, briefly moved into positive territory, and then plunged as investors reduced exposure to technology stocks and other companies vulnerable to changes in U.S. economic and regulatory policies. By the 11:30 a.m. morning close, the index had fallen 2,246.50 points, or 3.56%, to 60,835.36, while the broader TOPIX index dropped 98.01 points to 3,832.27.
Selling intensified during the early afternoon, with the Nikkei approaching the psychologically important 60,000-point level before bargain hunters entered the market. The recovery gathered momentum later in the session, reducing the benchmark's losses to 1,206 points by 3 p.m. and continuing into the close.
Semiconductor testing equipment maker Advantest was among the largest contributors to the decline, alongside Tokyo Electron, SoftBank Group, Kioxia Holdings and Kyocera. Investors were concerned that increased scrutiny of major technology companies and tighter regulations on artificial intelligence following the U.S. elections could affect spending on data centers and advanced semiconductors. Selling also reflected unease over high valuations following the substantial gains recorded by technology shares earlier in the year.
Other technology and industrial companies, including Sumitomo Electric Industries, Furukawa Electric, Taiyo Yuden and Murata Manufacturing, came under pressure. Nonferrous metals, petroleum and coal products, mining and electrical equipment were among the weakest sectors, while airlines, real estate companies and railway operators attracted selective buying.
Fast Retailing, the operator of Uniqlo, provided support for the Nikkei, while Nintendo and Yamato Holdings also attracted buyers. Yamato benefited from news that U.S. investment fund Farallon Capital Management had acquired a 5.02% stake and was pressing for management changes.
Currency markets were volatile as investors responded to the U.S. election developments and movements in American bond yields. The dollar traded as high as 158.74 yen before falling to around 157.40 yen, then recovering above 158 yen during afternoon trading. The stronger yen earlier in the session added pressure to exporters by reducing the yen-denominated value of overseas earnings.
Corporate earnings provided a contrasting picture of Japan's economy, with several major trading houses reporting substantial profit increases and raising their full-year forecasts despite the weakness in equity markets.
Mitsubishi Corporation reported a 74.2% increase in net profit to 619.6 billion yen for the six months through September, supported by a 20.5% increase in revenue to approximately 10.41 trillion yen. The company raised its net profit forecast for the fiscal year ending March 2027 by 9.1%, from 1.1 trillion yen to 1.2 trillion yen, putting it on course for a record annual profit and its first new earnings high in four years. Profit for the July-September quarter more than doubled to 321.1 billion yen.
Mitsui & Co. also delivered strong results, reporting a 35.7% increase in first-half net profit to 574.9 billion yen as revenue rose 23.1% to 8.32 trillion yen. The trading house raised its annual net profit forecast by 14.1%, from 920 billion yen to 1.05 trillion yen, representing expected growth of 25.9% from the previous fiscal year.
Itochu Corporation reported a 16% increase in first-half net profit to 580.5 billion yen, with revenue rising 9.4% to 7.93 trillion yen. Profit for the July-September quarter increased 32.5% to 286.7 billion yen. The company maintained its full-year net profit forecast of 950 billion yen, having already achieved 61.1% of the annual target during the first six months.
Marubeni raised its full-year net profit forecast by 8.6% to 630 billion yen after reporting a 10.6% increase in first-half profit to 338 billion yen. The company also increased its planned annual dividend from 115 yen to 125 yen per share, reflecting expectations of another record earnings year.
Outside the trading sector, telecommunications group NTT reported a 16% decline in first-half net profit to 500.2 billion yen despite an 8.7% increase in revenue to approximately 7.36 trillion yen. Operating profit fell 12.2%, reflecting pressure on profitability, although the company increased its full-year net profit forecast slightly to 994 billion yen from 980 billion yen. The revised forecast still represents a decline of 4.1% from the previous fiscal year.
Industrial machinery and aerospace manufacturer IHI reported a 52% increase in first-half net profit to 85 billion yen, with operating profit rising 65.6%. The company raised its annual net profit forecast by 7.6% to 185 billion yen, extending expectations for a third consecutive year of record earnings. It also increased its planned annual dividend by 2 yen to 25 yen per share.
The divergence between strong corporate earnings and falling share prices highlighted the increasingly cautious sentiment among investors, particularly toward companies exposed to the global technology investment cycle. Although Japanese trading houses continued to benefit from diversified international operations, investors remained sensitive to potential changes in U.S. trade, taxation and technology policies following the midterm elections.
Attention is now turning to another major round of corporate earnings on November 5, including Toyota Motor, Nintendo, Nippon Steel, Daikin Industries and several other leading Japanese companies. Their results and earnings forecasts are expected to provide further indications of whether improving corporate profitability can support Japanese equities following the recent market correction.
