Nikkei falls 2.65%, closes at session low as chip stocks slide

Key Facts

Japan's Nikkei index closed down 2.65% on Thursday, October 22, 2026, as technology stocks faced selling pressure that the Associated Press linked to concerns over data center financing. According to official Nikkei data, the index lost 1,713.40 points to finish at 62,907.84, its lowest level of the session. The decline followed gains on October 21, when the index closed at 64,621.24, up 0.85%, or 545.82 points. Thursday's trading opened at 64,539.36, below the previous session's close, before the index rose to an intraday high of 64,866.44. But the intraday advance failed to hold, and the index turned lower through the close, erasing the previous day's gains. Alongside the decline in stocks, the Nikkei Volatility Index rose 16.60% to 35.97, according to data from the same provider.

Semiconductor stocks were at the center of the selling pressure, with the Nikkei's sector index falling 5.28% to 20,798.24 in October 22 trading, according to Nikkei data. The chip index's percentage decline exceeded that of the benchmark in a session that included losses for manufacturing and testing equipment companies. In coverage published before the close, the Associated Press reported that shares of chipmaking equipment manufacturer Tokyo Electron fell 5.9% during trading. Shares of testing equipment manufacturer Advantest also declined 5% during the same session. The agency linked pressure on artificial intelligence stocks to concerns that data center construction could slow as borrowing costs rise, saying that "borrowing money has become increasingly expensive." The pressure comes in a market where technology stocks carry a substantial weight in Japan's main index. Technology accounted for 41.75% of the Nikkei, according to October 21 data, highlighting the index's exposure to the sector's performance.

On the economic front, Japan's Ministry of Finance released preliminary September trade data on October 21 showing that the trade deficit persisted for a 5th consecutive month. The deficit totaled 536,558 million yen, up 93.2% from the same month a year earlier, according to the official statement from the ministry and Japan Customs. Exports totaled 10,972,254 million yen, rising 16.7% year on year. Imports, meanwhile, reached 11,508,812 million yen, an annual increase of 18.9%. Imports thus exceeded exports in value and grew faster year on year than Japan's overseas sales. The deficit persisted and widened despite rising exports, as the value of goods Japan imported in September increased more sharply.

The trade breakdown showed growth in exports of goods linked to the chip industry, even as shares of companies in the sector fell in Thursday's session. According to the Ministry of Finance and Japan Customs, the value of semiconductor and component exports rose 49.4% in September from the same month a year earlier. The value of exports of semiconductor manufacturing equipment and related products also increased 43.9% year on year during the same month. On the import side, the value of Japan's oil purchases rose 51.1% year on year, according to the preliminary trade data. Oil import volumes increased 3.1% in September, leaving the increase in the value of oil imports greater than the rise in their volume.

Attention now turns to price data, with Japan's Statistics Bureau calendar scheduling the release of September's national consumer price index for October 23. The release will be followed by the Bank of Japan's next monetary policy meeting, which begins on October 29, according to the bank's official schedule. The meeting runs through October 30, with monetary policy discussions scheduled across both days. Also on October 30, the bank will release its accompanying Outlook Report. That coincides with the release of the preliminary October consumer price index for Tokyo, according to the Statistics Bureau's calendar.