TOKYO, January 5, 2026, 02:10 ET
Japan’s Nikkei 225, a price-weighted index of blue-chip shares, jumped about 3% on Monday in Tokyo’s first session of 2026 as investors chased chip and defense stocks and looked past U.S. action in Venezuela. “The market turned risk-on as if uncertainties and threats had been removed,” said Kazuaki Shimada, head of research at IwaiCosmo Securities. The Nikkei closed up 3.03% at 51,865, with Tokyo Electric Power (TEPCO) leading gainers on a 9.23% surge. 1
Currency traders echoed that appetite for risk and ran with a stronger dollar. The greenback hit two-week highs against the yen and touched 157.295 yen as traders focused on U.S. ISM manufacturing data due Monday and the U.S. non-farm payrolls report due Friday.
Japan’s own data also nudged sentiment. S&P Global’s final manufacturing PMI held at 50.0 in December, and the survey showed new-order declines eased to the softest pace since May 2024. PMI tracks business conditions; readings above 50 signal expansion.
TEPCO’s spike carried a company-specific catalyst. The utility said it aims to restart a reactor at its Kashiwazaki-Kariwa nuclear station, the world’s largest by capacity, and it targeted a restart as early as later this month; another report said TEPCO plans to restart its Unit 6 reactor on Jan. 20.
Heavy-industry names also crowded the top of the Nikkei leaderboard. IHI climbed 8.99%, Mitsubishi Heavy Industries gained 8.39%, and Kawasaki Heavy Industries rose 7.90%, while chip-test equipment maker Advantest rallied 7.84%.
Chip-related shares kept the bid as tech led gains around the region. Tokyo Electron and Advantest jumped more than 6%, and South Korea’s chipmakers Samsung Electronics and SK Hynix rose 3% to 6% as the KOSPI hit a record.
The currency-and-rates story now sits near the center of Japan’s equity trade. Bank of Japan Governor Kazuo Ueda said the central bank will keep raising rates if the economy and prices track its forecasts, after the BOJ lifted its policy rate — its main short-term rate — to 0.75% in December. Investors now watch the BOJ’s Jan. 22-23 meeting and outlook report for clues on how officials read inflation pressure from recent yen weakness.
A softer yen usually boosts exporters’ profits when they book overseas sales in yen, but it also raises import costs and can stiffen the case for more tightening. The Nikkei finished just shy of the 52,000 round number, a level some chart-focused investors track.
But markets risk underpricing the next geopolitical jolt. A renewed escalation around Venezuela could swing oil and risk sentiment quickly, and a sudden yen rebound could sap momentum in exporters and chip-linked names.
Traders in Tokyo now turn to the Jan. 9 U.S. jobs report for a fresh read on rate-cut expectations — and the dollar’s next move against the yen.
