Nikkei closes at 62,189.65 ahead of BOJ meeting as inflation outlook draws attention
Key Facts
The Nikkei 225 ended the October 26 session at 62,189.65, according to EL7 data, down from its close of 62,693.16 on October 23. The close followed morning trading in which the index fell 0.43% to 62,425.47, while the broader Topix rose 0.48% to 3,984.74. Reuters said chip stocks weighed on the Nikkei in morning trading despite broader market gains. Available data do not confirm the rise attributed to the October 27 session or its explanation linked to Anthropic's IPO papers, so it does not form a basis for describing the index's movement in that session. The previous days' moves put Japanese equities in the context of regional volatility driven by pressure on technology stocks.
Pressure on chip stocks was part of a broader wave affecting artificial intelligence shares. On October 22, the Nikkei fell 2.7%, alongside a 3.5% drop in South Korea's Kospi and a 3% decline in Hong Kong's Hang Seng. An Associated Press report linked volatility in the sector's shares to rising borrowing costs to fund data center construction and additional chip purchases. The report also pointed to concerns that share prices may have risen beyond what expectations justified. Against that backdrop, chip stocks weighed on the Nikkei in October 26 trading amid volatility in technology shares, rather than a confirmed upward trend supported by the available facts.
An analyst at Monex said the Nikkei showed signs of a short-term technical valuation decline, but warned that prevailing concerns could make a recovery slow. The assessment follows the index's October 22 drop and comes amid the pressure from chip stocks that Reuters reported in October 26 morning trading. The analyst did not specify a recovery timeline or a target level for the index. The stock market volatility coincided with Japan's September consumer price data, which showed the index excluding fresh food rising 2.1% year on year. The index excluding fresh food and energy rose 2.4%, according to Japan's Statistics Bureau.
Attention now turns to the Bank of Japan's monetary policy meeting, scheduled for October 29 and 30. Reuters, citing people familiar with the matter, said the bank is expected to leave interest rates unchanged at the meeting, which ends on October 30, and may raise its inflation forecasts in its report. One source added that consumer price growth may remain elevated for longer than expected, with no major change in underlying inflation. The sources said the possibility of another rate hike in December may remain. The outlook report is due on October 30, with the full text to be published on the next business day at 2:00 p.m., according to the bank's official schedule.