Tokyo Stock Market Outlook for December 1, 2025: Nikkei 225, Yen Intervention Risks, BOJ Hike Bets and Micron’s AI Chip Gambit

As the Tokyo Stock Exchange reopens on Monday, December 1, 2025, investors face a market caught between powerful tailwinds (Fed rate‑cut hopes, record AI investment) and growing domestic headwinds (yen volatility, fiscal worries, and looming Bank of Japan tightening).

Below is what you need to know before the opening bell.

Quick snapshot before the open

Nikkei 225 last close: 50,253.91 (+0.2% Friday; +3.4% on the week, but down about 4% for November – its worst November since 2011). ^[1]
Futures: International Nikkei futures are modestly higher versus Friday’s cash close, pointing to a slightly firmer start. ^[2]
FX: Dollar/yen is hovering around ¥156 per dollar after the dollar’s worst week in four months, with Japan openly warning about potential FX intervention. ^[3]
Policy watch: Tokyo inflation at 2.8% and BOJ leaks about a near‑term rate hike are pushing up rate‑hike odds for the December BOJ meeting. ^[4]
Corporate spotlight: Micron’s planned ¥1.5 trillion (US$9.6bn) AI memory chip plant in Hiroshima is a major new catalyst for Japan’s semiconductor and AI ecosystem. ^[5]
Oil & macro: OPEC+ is widely expected to keep oil output unchanged at today’s meeting, while Monday’s US ISM Manufacturing and global PMIs dominate the international data calendar. ^[6]

1. Where Tokyo left off: a bruising November, but a better week

The Nikkei 225 finished Friday at 50,253.91, up 0.2% on the day. The index gained roughly 3.4% over the week, yet still ended November with about a 4% monthly loss, marking its weakest November since 2011. ^[7]

The broader TOPIX added around 0.3%, helped by real estate, banking and textile stocks earlier in the week, while implied volatility on Nikkei options eased but remained elevated, with the Nikkei Volatility index sitting in the low‑30s. ^[8]

Context matters: just a month ago, the Nikkei broke above 51,000 for the first time, powered by intense enthusiasm for AI‑related names. ^[9] That rally was followed by:

A sharp 3% single‑day drop on November 18 amid a global tech selloff and a spike in Japanese government bond yields. ^[10]
A wave of selling in Japanese assets as investors fretted about the rare combination of rising yields, a falling yen and a wobbling equity market, which some analysts see as a warning shot on Japan’s fiscal and policy trajectory. ^[11]

Heading into December, Tokyo remains near historic highs, but recent swings underline how fragile sentiment still is.

2. Futures hint at a cautiously positive open

Over the weekend, Nikkei futures traded slightly above Friday’s close:

Dollar‑denominated Nikkei 225 futures on CME were quoted just above 50,250, up about 0.2–0.3% from the cash close late on November 29 (US time). ^[12]
Derived Nikkei futures tracked by Investing.com showed a similar picture, around 50,280 (+0.4%) at Friday’s settlement. ^[13]

That setup implies a mildly firmer start, but the open could easily be reshaped by:

Fresh headlines from Sunday’s OPEC+ meeting
Any additional moves in the yen overnight
Re‑pricing of BOJ hike expectations as investors digest the weekend’s policy news

Don’t treat the futures signal as a guarantee; think of it more as a slight bullish bias going into the bell.

3. Yen on intervention watch as Ueda’s speech looms

The yen is still at the center of the story.

The dollar index has had its worst week since July as traders increasingly price in a Fed rate cut on December 10, but the dollar remains strong against the yen. ^[14]
USD/JPY is trading around ¥156, only a little below recent 10‑month highs, after drifting slightly lower late last week. ^[15]

On Sunday, Finance Minister Satsuki Katayama called the yen’s rapid slide and erratic FX swings “clearly not driven by fundamentals”, and stressed that Japan is ready to intervene in the FX market if moves become excessively speculative. ^[16]

Crucially, the same Reuters report notes that:

Markets have been on alert for potential intervention, though the yen stabilised late last week.
Attention on Monday will focus on a speech by BOJ Governor Kazuo Ueda, where investors hope to hear hints about whether the central bank will raise rates at its December meeting. ^[17]

What this means for Monday’s session

Exporters (autos, machinery, electronics) typically benefit from a weak yen, but will trade nervously on any hint of imminent intervention or a more hawkish BOJ.
Domestic plays (retailers, utilities, railways) may outperform if markets start to price in a somewhat stronger yen and slower imported inflation.
Financials, especially the “megabanks”, stand to gain from any steepening of the yield curve if the BOJ is seen edging closer to sustained rate hikes. ^[18]

4. Tokyo inflation keeps BOJ hike bets alive

Friday’s data from Japan’s capital put the BOJ tightening story front and center:

Tokyo core CPI (ex‑fresh food) rose 2.8% year‑on‑year in November, above the BOJ’s 2% target and slightly ahead of market expectations.
A narrower gauge watched closely by the BOJ, which also strips out fuel, likewise rose 2.8%, signalling persistent underlying price pressure. ^[19]

Additional October data showed:

Retail sales and factory output both increased
The jobless rate held at 2.6%, underscoring a tight labour market despite external headwinds ^[20]

That backdrop helps explain why:

A Reuters poll shows a slim majority of economists now expecting the BOJ to raise rates as soon as December, with forecasts for the policy rate to reach around 0.75% by March 2026. ^[21]
Another Reuters report, citing unnamed sources, says the BOJ is preparing markets for a possible near‑term hike, partly to address the weak yen and persistent inflation. ^[22]

However, the picture is not one‑sided. The same inflation report highlighted:

Domestic demand remains uneven
Japan’s economy contracted in Q3, while government advisers worry a premature hike could choke off a still‑fragile recovery ^[23]

For Monday’s open, the message is:

Rate‑hike odds are rising, but timing is still uncertain. That should keep rate‑sensitive sectors (banks, brokers, real estate, utilities) in focus.

5. Takaichi’s massive stimulus and fiscal jitters

Japan’s new prime minister Sanae Takaichi has pushed through a ¥18.3 trillion (US$117bn) supplementary budget to fund a ¥21.3 trillion stimulus package, the largest since the COVID‑19 era. ^[24]

Key elements include:

¥2.7 trillion in tax cuts
Around ¥8.9 trillion in cost‑of‑living support, such as cash handouts and utility subsidies
Roughly ¥6.4 trillion aimed at “strategic industries” like semiconductors and AI ^[25]

Most of the package is financed via additional bond issuance – about ¥11.7 trillion in new government bonds this year alone. ^[26]

This dual nature of the stimulus explains the split in market reaction:

On the positive side, the measures support household spending, corporate investment and key tech supply chains, a clear plus for domestically focused sectors and advanced manufacturers.
On the negative side, a Reuters analysis noted that the combination of rising bond yields, a weaker yen, and a shaky equity market has triggered a “scramble to sell Japan,” highlighting growing worries about long‑term fiscal sustainability. ^[27]

Expect investors on Monday to keep a close eye on:

Government bond yields and financial stocks
Any fresh commentary from rating agencies or overseas investors on Japan’s debt path
Stocks directly benefiting from subsidies, especially in chips and AI infrastructure

6. Micron’s ¥1.5 trillion bet: a big AI chip story for Japan

One of the most market‑moving headlines from November 29 is Micron Technology’s decision to invest ¥1.5 trillion (US$9.6bn) in a new plant in Hiroshima to manufacture advanced high‑bandwidth memory (HBM) chips, according to a Nikkei‑sourced Reuters report. ^[28]

Key details:

Construction is expected to start around May 2026 at an existing site.
Shipments of HBM chips could begin around 2028.
Japan’s Ministry of Economy, Trade and Industry (METI) may provide up to ¥500bn in subsidies for the project. ^[29]

Strategically, this matters because:

HBM is a core component in AI accelerators and data‑center hardware, making it one of the hottest segments in semiconductors.
The plant helps Japan revive its chip industry, diversify production away from Taiwan, and deepen ties with leading US chipmakers. ^[30]

On Monday, watch for knock‑on moves in:

Semiconductor equipment suppliers (e.g., lithography, testing, and packaging‑tool makers) that might benefit from long‑term capex. ^[31]
AI‑linked conglomerates like SoftBank, which tend to track global AI sentiment. ^[32]

Even though Micron’s new plant won’t ship for years, the headline reinforces the narrative that Japan is becoming a key node in the global AI and memory chip supply chain – a supportive story for tech‑heavy segments of the Nikkei.

7. Global cues: Wall Street, AI stocks and Fed‑cut fever

Overnight leads from Wall Street and broader global markets are broadly supportive:

The S&P 500, Dow and Nasdaq all rose on Friday, capping a week of gains and leaving the S&P and Dow slightly up for November, even as the Nasdaq logged about a 1.5% monthly decline amid renewed doubts about stretched AI valuations. ^[33]
A series of Fed speeches and softer data have pushed futures‑implied odds of a December Fed cut to roughly 85–87%, compared with around 30–40% only a week earlier. ^[34]

Asian markets have responded by:

Ending a volatile November “on firmer ground”, with the MSCI Asia ex‑Japan index up about 2.7% on the week despite a tough month. ^[35]
Seeing Japan’s Nikkei post a solid weekly gain even as it remained down sharply on the month, mirroring the global “AI boom, AI backlash, AI rebound” cycle. ^[36]

For Tokyo investors, the global message is:

Rate‑cut hopes support equities and risk assets.
But AI and tech names – a big weight in the Nikkei – remain under scrutiny after heavy outflows and sharp drawdowns earlier in November. ^[37]

How the US tech complex trades in the next session – and how the market interprets any Fed commentary ahead of the December 10 FOMC meeting – will continue to be important for sentiment in Japanese growth stocks.

8. Oil, OPEC+ and Japanese energy names

Energy is another key external variable heading into Monday’s open:

OPEC+ is widely expected to keep its current production policy unchanged at Sunday’s meeting, after having already paused planned output increases for Q1 2026 amid fears of a supply glut. ^[38]
Recent reports note that the group is focusing less on near‑term cuts and more on long‑term capacity baselines, a debate that could influence quotas from 2027 onward.
Oil prices have drifted lower in November, leaving Brent just above the low‑$60s and WTI in the high‑$50s, with markets watching both OPEC+ and Russia‑Ukraine peace efforts for direction. ^[39]

Implications for Tokyo:

Trading houses and refiners could see some support if oil remains subdued, improving margins.
Airlines, logistics and other fuel‑sensitive sectors benefit from lower crude, though any escalation in geopolitical risk could quickly reverse the trend.

9. Monday’s domestic calendar: light on data, heavy on events

Japan’s macro data calendar is relatively quiet on Monday:

A detailed forex‑focused economic calendar shows no major Japan releases scheduled for December 1, with indicators such as consumer confidence, the monetary base and services PMI coming on Tuesday, December 2instead. ^[40]

However, there are still important Japan‑specific catalysts:

BOJ Governor Ueda’s speech
- Markets will parse every line for hints about the December 18–19 policy meeting and whether a rate hike is likely before year‑end. ^[41]
New listings on the Tokyo Stock Exchange
- The TSE will debut at least two stocks on Monday:
  - INTELLEX HOLDINGS Co., Ltd. (Code: 463A) – base price ¥959, daily price limit ¥150
  - QPS Holdings Inc. (Code: 464A) – base price ¥1,736, daily price limit ¥400 ^[42]
- New listings often see significant volatility, drawing in short‑term traders and adding liquidity to the broader market.
Global data later in the day (Japan time)
- The US ISM Manufacturing PMI for November is released on Monday at 10:00 a.m. ET, and is a key gauge of US industrial momentum. ^[43]
- Global manufacturing and services PMIs from S&P Global will also be published during the week, providing a read‑through on worldwide demand and supply‑chain conditions. ^[44]

Any downside surprise in US or global PMIs could weigh on cyclical stocks in Tokyo (autos, machinery, chemicals), while a stronger‑than‑expected print might reinforce the “soft landing + rate cuts” narrative that markets currently favour.

10. Sectors and themes to watch at the open

Here’s how the main themes translate into Monday’s likely winners and losers:

Potential outperformers (if current trends hold)

Exporters & global cyclicals
- Still benefiting from a weak yen around ¥156, though vulnerable to any sudden hints of intervention. ^[45]
Financials (banks, insurers, brokers)
- Helped by rising expectations of a BOJ hiking cycle and the prospect of steeper curves as both Japan and the US edge toward easing policy in different ways. ^[46]
Semiconductors and AI ecosystem
- Riding the tailwind from Micron’s Hiroshima HBM investment and continued global demand for AI‑related hardware, even as valuations remain under scrutiny. ^[47]

Areas that could lag or stay choppy

Highly valued growth/AI names
- After a volatile month and heavy foreign outflows from Asian equities, some investors remain cautious toward richly valued AI plays despite the structural growth story. ^[48]
Rate‑sensitive defensives (utilities, REITs)
- A faster‑than‑expected BOJ tightening path would pressure long‑duration assets, though they may still appeal as safe havens if equity volatility spikes. ^[49]

Final thought: an inflection month for “reflation Japan”

December opens with Japan at a policy crossroads:

Inflation in Tokyo is sticky above target. ^[50]
The government is delivering massive stimulus funded largely by new debt. ^[51]
The BOJ is openly preparing markets for further tightening, while the Finance Ministry is signalling it is ready to act on FX if yen weakness overshoots. ^[52]

At the same time, global markets are betting that the Fed is about to cut again, OPEC+ is set to keep oil output steady, and a new wave of investment – like Micron’s Hiroshima plant – cements Japan’s role in the AI supply chain. ^[53]

For traders heading into Monday’s Tokyo open, the key is balance:

Watch the yen, listen closely to Ueda, and respect the fact that while Japan is finally escaping deflation, it is doing so in a world where both policy and valuations are shifting fast.

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

https://youtube.com/watch?v=gPzhnQx4fLs