Japan’s Nikkei share average climbed 2.33% on Monday, recovering part of a technology-driven slump that had pushed the benchmark into bear market territory and shaken confidence in artificial intelligence stocks.
The Nikkei 225 closed at 58,775.50, gaining 1,340.73 points, while the broader Topix advanced 2.97% to 3,818.16. The rebound followed Friday’s 6% plunge, which left the Nikkei more than 20% below its June record, the threshold commonly used to define a bear market.
Buying extended across the Tokyo market rather than remaining confined to semiconductor companies. Of the Nikkei’s 225 constituents, 208 rose and 17 fell, indicating widespread demand after several sessions of selling. The recovery nevertheless left the benchmark substantially below its level at the beginning of last week.
Investors took encouragement from Friday’s gains on Wall Street, where technology stocks recovered after sharp declines linked to concerns about potential changes in United States policy towards artificial intelligence. The Nasdaq Composite gained 1.09% and the S&P 500 rose 0.32%, providing a firmer backdrop for Asian trading.
Nvidia and Tesla had recovered in that American session after investors reassessed the implications of Democratic victories in the US midterm elections. Market participants have questioned whether tighter scrutiny of artificial intelligence could slow the construction of data centres and affect demand for the advanced chips and equipment supplying them.
Those concerns remain particularly significant for Tokyo’s equity market, where semiconductor equipment manufacturers, technology investors and industrial suppliers carry substantial weight in benchmark movements. The sell-off had spread beyond companies directly involved in artificial intelligence, reflecting broader reductions in exposure to riskier assets.
Takuma Ikemoto, a market analyst at Tokai Tokyo Intelligence Laboratory, cautioned that uncertainty surrounding American policy could limit further advances once the initial wave of buying subsided. His assessment highlighted the distinction between a recovery from heavily sold conditions and a sustained improvement in expectations for technology earnings.
Individual stock movements showed that the rally was uneven despite the strong headline index gains. Consulting services company Baycurrent climbed 8.8% to a record closing high, making it the Nikkei’s strongest percentage performer. Construction group Shimizu gained 7.7%, while industrial manufacturer Mitsubishi Electric advanced 7.3%.
SoftBank Group, a prominent investor in artificial intelligence ventures, remained under pressure during the session, illustrating continuing investor caution towards businesses closely associated with the sector’s expansion. Its weakness contrasted with gains elsewhere and suggested that buyers were distinguishing between companies rather than returning indiscriminately to all technology-related shares.
Banking stocks also attracted demand as Japanese government bond yields moved higher. Rising yields can support banks’ lending margins, although their effect depends on funding costs and broader credit conditions. Automakers, retailers and non-ferrous metal producers contributed to the market’s advance, giving the recovery a wider base than the previous technology-led fluctuations.
The Topix’s larger percentage gain reflected the strength of shares across a broader range of companies. On the Tokyo Stock Exchange’s Prime Market, 1,412 issues advanced, compared with 120 declines and 13 unchanged. Thirty-one of the exchange’s 33 industry groups finished higher, with food and shipping among the exceptions.
Developments in the Middle East also shaped investors’ assessment of market risk. US President Donald Trump said on Sunday that further American attacks on Iran were highly unlikely while diplomatic discussions continued, with Qatar involved in mediation. The comments offered some reassurance, although accounts of attacks on vessels near the Strait of Hormuz underscored the fragility of the situation.
Disruption to energy shipments through the waterway has complicated the outlook for Japan, which depends heavily on imported fuel. Changes in oil prices influence corporate costs, household spending and inflation expectations, making the security of Gulf shipping an important consideration for investors alongside movements in technology shares.
Monday’s closing figures also showed the distance still to be recovered after the previous week’s losses. The Nikkei had finished November 2 at 63,081.86, well above Monday’s level despite the sizeable daily increase. The gap illustrated how a sharp one-day advance can coexist with substantial losses over a longer trading period. Investors therefore remained sensitive to changes in overseas equity markets, policy expectations and corporate earnings forecasts.
The session’s strongest performers included businesses outside the artificial intelligence supply chain, while the weaker areas showed that the rebound was not uniform. Shipping and food shares lagged the broader market as investors repositioned portfolios following the previous week’s abrupt decline.
