Japan Stocks: 7 Things to Know Before the Nikkei 225 Opens on November 26, 2025

Tokyo traders head into Wednesday’s session with the Nikkei 225 stuck in a tug‑of‑war between AI euphoria and AI fear, a still‑weak yen, rising bond yields, and a brand‑new ¥21.3 trillion stimulus package. Here’s a detailed look at what’s driving sentiment right now – and what’s likely to matter when the Japan stock market opens on Wednesday, November 26, 2025.

1. How Tokyo Closed on November 25

Japan’s first trading day of the week (markets were shut Monday for a holiday) ended with a very small gain for the main index and a mild loss for the broader market:

Nikkei 225: closed at 48,659.52, up 0.07% from Friday, after being up more than 1% at one point.
Topix: finished at 3,290.89, down 0.21%. ^[1]

The pattern tells you a lot: there was risk appetite at the open – fueled by Wall Street’s tech rally – but most of those gains evaporated as the session wore on.

From a slightly longer lens, the Nikkei is still about 7% below its early November closing high around 51,500. ^[2] The market has cooled from “everything AI goes up” to “show me the earnings, show me the policy.”

Key takeaway for the open: The index isn’t in free fall, but it’s fragile. Any fresh shock – especially around AI or the yen – can swing the market quickly.

2. SoftBank’s AI Shock Is the Story to Watch

The single biggest driver in Tokyo on Tuesday was SoftBank Group (9984) – and not in a good way.

SoftBank dropped close to 10% on the day, after sliding about 11% in the previous session before the long weekend.
It hit a roughly 2½‑month low and shaved an estimated 300+ points off the Nikkei’s early advance by itself. ^[3]

The catalyst: mounting worry that Alphabet’s new Gemini AI models could seriously challenge OpenAI – a cornerstone SoftBank investment through its Vision Fund and related deals. Multiple reports highlight that:

Gemini 3 has received rave reviews from high‑profile users, raising questions about ChatGPT’s competitive edge. ^[4]
SoftBank has heavy financial and strategic exposure to OpenAI – reportedly committing tens of billions of dollars and tying it into large infrastructure ventures – so any perceived erosion of OpenAI’s moat hits SoftBank’s valuation hard. ^[5]

Importantly, other Japanese AI and chip names were up:

Advantest (6857) rose about 4.2%. ^[6]
Tokyo Electron (8035) gained just over 3%, riding strong demand for semiconductor names after a US chip rally. ^[7]

Analysts noted that SoftBank’s slump was very stock‑specific: nerves over OpenAI and circular AI financing, rather than a broad rejection of AI or chips. ^[8]

What to watch at the open (Nov 26):

SoftBank’s first hour: Any sign of dip‑buying could help the Nikkei revisit the 49,000 line; further forced selling would pressure the index again.
AI sentiment headlines: New commentary from OpenAI, Alphabet, or SoftBank itself could swing the stock strongly in either direction.
Correlated names: AI‑adjacent chip stocks (Tokyo Electron, Advantest) may move inversely to SoftBank if investors rotate within the “AI trade.”

3. Wall Street’s Fed‑Cut Hopes Still Support Risk Appetite

Overnight, the global backdrop remained supportive for equities:

US stocks were on track for a third straight day of gains on Tuesday, with the Dow up about 1.2%, the S&P 500 up ~0.7%, and the Nasdaq Composite up ~0.35%. ^[9]
Investors are now pricing in roughly an 85% chance of a 25 bp Federal Reserve rate cut in December, up sharply from around 50% a week ago, according to Fed funds futures data. ^[10]
The US 10‑year Treasury yield dipped just below 4.0%, easing financial conditions at the margin. ^[11]

AI is again at the heart of Wall Street’s move:

Alphabet climbed to near a $4 trillion market cap, helped by media reports that Meta may buy billions of dollars’ worth of Google‑designed AI chips from 2027 onward. ^[12]

That’s a double‑edged sword for Tokyo:

It supports sentiment in Japanese chip and equipment makers that feed the global AI build‑out.
It amplifies concerns that OpenAI – and by extension SoftBank – could lose share to Google and others.

What to watch:

If US futures stay positive into the Tokyo open, that should help exporters and tech names.
Any sudden rethink of the December Fed cut (for example, from stronger‑than‑expected US data later Wednesday) could flip the tone quickly.

4. Yen Near Intervention Zone, Bond Yields Near Multi‑Year Highs

The yen and Japan’s bond market remain critical for equity investors.

Yen: slightly stronger today, but still historically weak

Recent trading shows USD/JPY around 155–156, after briefly hitting the 157.9 area last week – levels associated with past episodes of official intervention. ^[13]
On Tuesday, Reuters reported the yen firmed about 0.6% to ~155.9 per dollar as US yields fell and rate‑cut bets increased. ^[14]
However, FX strategists at MUFG and others still describe the yen as “near its weakest levels in over 10 months”, with traders watching for possible official action if USD/JPY revisits the 158–160 zone. ^[15]

Japanese officials are clearly uneasy:

Finance and economic ministers have said “intervention is an option” and that they are watching moves with a “high sense of urgency.” ^[16]

JGB yields: climbing on stimulus and inflation

The 10‑year Japanese government bond (JGB) yield now trades around 1.8%, close to its highest levels in many years. ^[17]
Rising yields reflect both persistent inflation and concerns over new government bond issuance to fund stimulus.

Equity implications for Wednesday:

A slightly stronger yen (moving toward 155) tends to weigh on exporters like autos and machinery, but can support domestic plays (retailers, utilities) by easing import‑cost pressure.
Further upside in yields is usually positive for banks and insurers (better margins) but negative for REITs and high‑dividend defensives.

5. Domestic Macro: Hot Inflation, Mixed Growth, Huge Stimulus

Inflation: still above the BOJ’s target

Japan’s core CPI (excluding fresh food) rose 3.0% year‑on‑year in October, up from 2.9% in September and well above the Bank of Japan’s 2% target.
A narrower “underlying” index that strips out both fresh food and energy climbed 3.1%, also accelerating. ^[18]

These figures will be a key input for the BOJ’s December 18–19 meeting, where markets are debating whether the bank could deliver another rate hike after lifting short‑term rates to 0.5% earlier this year. Two BOJ board members already wanted to hike to 0.75% at recent meetings, underscoring the shift in focus toward inflation risk. ^[19]

Growth: manufacturing weak, services still strong

November’s flash Manufacturing PMI improved to 48.8 (from 48.2) but stayed below 50 for a fifth straight month, pointing to ongoing contraction in factory activity.
By contrast, the services PMI held at 53.1, and the composite PMI rose to 52.0, its eighth month above 50, signaling expansion. ^[20]

Inflation pressures remain broad‑based: input costs are rising at their fastest pace in six months, though firms are passing through price increases more cautiously.

Politics and fiscal policy: Takaichi’s big bet

Prime Minister Sanae Takaichi’s cabinet approved a ¥21.3 trillion (≈$135bn) stimulus package on Nov. 21 – the largest since the COVID era – including ¥17.7 trillion in spending and ¥2.7 trillion in tax cuts. ^[21]
Markets worry about fiscal sustainability: the plan has pushed the yen to 10‑month lows and super‑long JGB yields to record highs, according to Reuters coverage. ^[22]
A supplementary budget to fund the package is expected to be approved by the cabinet around November 28, with parliamentary approval targeted by year‑end. ^[23]

Geopolitics: China–Japan tensions and tourism

MUFG’s FX research highlights a growing geopolitical spat with China:

Beijing has criticized Tokyo’s comments suggesting Japan’s forces could be drawn into a Taiwan conflict, and Chinese authorities have reportedly encouraged cuts to flights and group tours to Japan.
Chinese tourists made up over 40% year‑on‑year growth in visitor numbers and about 24% of total foreign tourist spending in the first three quarters of 2025 – meaning any sustained drop in visitors is a real headwind for hospitality, retailers, and transport. ^[24]

What this means for stocks:

Domestic consumption plays (department stores, railways, theme parks, hotels) face a tug‑of‑war between fiscal stimulus & solid services demand and weaker China tourism and higher costs.
Rate‑sensitive sectors need to navigate both BOJ policy risk and higher long‑term yields driven by stimulus and inflation.

6. Sector and Stock Themes to Watch on November 26

6.1. AI, chips, and big tech

SoftBank Group (9984): the epicenter of AI‑related volatility. Continued heavy selling would likely cap the Nikkei, while even a modest rebound could unlock index gains given its weight. ^[25]
Advantest (6857) and Tokyo Electron (8035): both rallied 3–4% on Tuesday, tracking the global AI hardware boom and strong recent US chip earnings. ^[26]
Fast Retailing (9983), the Uniqlo parent and key Nikkei heavyweight, closed up about 2.2% at ¥55,990. A risk‑on mood and a moderately strong yen could keep interest in high‑quality growth names like this. ^[27]

Watch for:

Follow‑through from overnight AI moves in the US.
Any fresh commentary from Alphabet, OpenAI, or SoftBank that changes the perceived AI leadership hierarchy.

6.2. Autos and exporters

Toyota (7203) closed at ¥3,077, down roughly 0.65% on Tuesday. ^[28]
A USD/JPY move below 155 could pressure autos and machinery stocks; holding above 156 tends to keep the export earnings story intact.

At the same time, Toyota’s ongoing global investment in hybrids and EVs – including new US production commitments – remains a medium‑term support, even if the short‑term FX wind shifts. ^[29]

6.3. Financials and rate‑sensitives

Rising JGB yields around 1.8% are constructive for megabanks and insurers, which have long struggled with ultra‑low rate margins. ^[30]
On the flip side, J‑REITs and bond‑like, high‑dividend stocks can see pressure as investors re‑price risk‑free returns.

Any hint in BOJ commentary or leaks that a December hike is more likely would deepen this rotation.

6.4. Tourism, airlines, and consumer plays

Given the China–Japan spat and reports of flight cuts and tour cancellations, transport and tourism names are in focus:

Airlines, rail operators, department stores, and theme‑park operators could be sensitive to any incremental headlines, especially if new restrictions on Chinese visitors emerge. ^[31]
However, robust domestic services demand and stimulus‑linked support may partially offset external weakness. ^[32]

7. Key Data and Events Around the Open

Japan: relatively light just before the open

The immediate domestic data calendar for Wednesday morning (Nov 26) is relatively quiet, but markets are already looking toward:

Tokyo CPI (Nov) – due Thursday, Nov 27, with consensus around 2.8% year‑on‑year for both headline and core ex‑fresh food. ^[33]

Given Tokyo CPI is a leading indicator of national inflation, any upside surprise would likely:

Increase expectations for a BOJ hike in December or January, and
Push yields and the yen higher, with mixed implications for different stock sectors.

Global data: US PCE and more on Wednesday

For global macro traders, Wednesday, Nov 26 (US time) brings:

US PCE price index – the Fed’s preferred inflation gauge – with the next update scheduled for Nov. 26. ^[34]
US durable goods orders and jobless claims, plus weekly EIA crude oil inventories, all of which can move yields, the dollar, and risk sentiment. ^[35]

These releases land after Tokyo’s close, but traders often position ahead of them. If markets grow more confident in a soft‑landing + rate‑cut scenario, that’s generally supportive for global equities, including Japan.

Final Thoughts: What This All Means for Wednesday’s Open

Putting it together, here’s the picture heading into November 26, 2025:

Tone: cautiously constructive – global stocks are rising on Fed cut hopes, but Tokyo is wrestling with idiosyncratic AI and policy risks. ^[36]
Big swing factor: SoftBank vs. the rest of AI. If SoftBank stabilizes or rebounds, chip and tech strength could lift the Nikkei. If selling accelerates, it may overpower broader optimism. ^[37]
Macro overhangs:
- Persistent above‑target inflation and a looming BOJ decision. ^[38]
- A huge fiscal stimulus that supports growth but keeps the pressure on yields and the yen. ^[39]
- China–Japan tensions and the risk to tourism flows. ^[40]

For traders and investors, the opening hour on Wednesday will likely hinge on three quick checks:

SoftBank and AI names – is the selling exhausted, or is there another leg down?
USD/JPY around 155–156 – is the yen strengthening further toward 155, or drifting back above 156–157?
US futures and yields – are markets still leaning into the December Fed‑cut narrative, or starting to question it?

Stay nimble: the underlying story is still one of rotation, not collapse – away from the most crowded AI winner and toward companies and sectors whose fundamentals are now catching up with the hype.

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security or financial product.