Edward Marchesi The Tokyo Stock Exchange recorded a week of sharp declines, with the main Nikkei index closing at 62.693,16 points, down 0,34% . The downward trend began on October 22, when the market suffered a sharp 2,65% drop due to a pullback in the tech rally, before extending its losses in the first session of the following week, when it opened 0,39% lower at 62.451,33 points.
Weekly performance of the Nikkei and Topix
Overall, Japan's two main indices fell about 4% from their end-July levels. The Topix fell to 3.965,81 points, a loss of 0,79% . The decline was fueled by massive selling in technology stocks related to artificial intelligence and semiconductors, sectors that had driven growth in previous months.
Reasons for pressure: oil and artificial intelligence
The surge in oil prices , driven by an attack on a Saudi oil field, has rekindled concerns about energy costs and negatively impacted investor sentiment. At the same time, debate over the profitability of AI-focused companies has generated uncertainty: market valuations now appear too high relative to near-term profit prospects, leading to sell-offs in large-cap stocks.
The yen and the Bank of Japan's moves
Meanwhile, the Japanese yen remained nearly stable against the dollar, hovering around 157 yen per dollar and 176,10 yen per euro. This trend was influenced by the latest core inflation data from September, which exceeded the Bank of Japan 's target for the first time in nine months . Analysts now expect tighter monetary policy guidance, with the prospect of possible rate tightening in the coming months.
Outlook for next week
Looking ahead, market participants will closely monitor geopolitical developments related to oil and the BoJ's decisions on the yield curve. Further strengthening of the yen or new energy price news could alter the current downtrend, but for now, the Nikkei remains under pressure, with investors awaiting clearer signs of recovery.