Tokyo Stock Market Today, Dec. 9, 2025: Nikkei 225 Closes Above 50,650 as Investors Brace for Fed Cut and BoJ Hike

Japan’s stock market ended Tuesday’s session slightly higher, shrugging off global risk aversion, a sharp GDP downgrade and overnight earthquake headlines as traders focused on this week’s crucial Federal Reserve and Bank of Japan (BoJ) decisions.

Market snapshot: Nikkei edges higher, TOPIX barely moves

The Nikkei 225 closed at 50,651.75, up 69.81 points (+0.14%) on Tuesday, December 9, 2025, according to the official Nikkei index site. ^[1]

The broader TOPIX index hovered around 3,386, essentially flat on the day, with Bloomberg’s real‑time wrap noting that Japan’s TOPIX was “little changed” even as regional markets weakened, while FT data put the index near 3,385.8 in afternoon trading. ^[2]

That left Tokyo stocks close to record territory but trading cautiously:

Japan outperformed most of Asia, where a gauge of regional shares fell around 0.4–0.5% as investors grew nervous about the pace of Fed easing. ^[3]
Japanese government bond yields stayed elevated, with 10‑year JGBs near 2%, their highest levels since the mid‑2000s. ^[4]
The yen traded roughly around ¥155–156 per dollar, little changed after Monday’s moves. ^[5]

In other words, the Tokyo stock market today was calm on the surface, but trading under the shadow of two central banks and fragile macro data.

How trading unfolded: From firm open to choppy session and modest gain

Strong open, wobble at midday, firm finish

Opening bell: Japan’s Nikkei 225 opened about 0.19% higher at 50,677.36, according to a global markets update from BusinessToday, mirroring a mild rebound in sentiment after Monday’s US losses. ^[6]
Mid-morning & midday: By late morning, Reuters reported the Nikkei had slipped “less than 0.1%” to 50,552.48with half an hour to go before the midday break, while TOPIX dipped 0.1% to 3,381.09 as investors trimmed risk ahead of the Fed meeting. ^[7]
Afternoon & close: As US equity futures stabilised and tech shares stayed firm, Japanese stocks clawed back losses. By the close, the Nikkei had turned decisively positive, finishing at 50,651.75 (+0.14%), a touch above where it started the day and just above Monday’s close around 50,582. ^[8]

AP’s Asia overview described Tokyo as the regional outlier, noting the Nikkei was up about 0.2% around 50,691 at one point, even as China, South Korea and Australia traded lower. ^[9]

This intraday pattern—firm open, Fed‑jitters wobble, late stabilisation—is typical of markets waiting for an event that could reset global rates and risk appetite.

Sector movers: Chips and AI help, Uniqlo drags

Under the hood, Tuesday’s Tokyo session was anything but boring.

Tech and semiconductor names on the front foot

Reuters’ intraday market report highlighted strong gains in chip‑related shares, helped by a rebound in US tech and ongoing enthusiasm for AI hardware:

Disco (chip‑equipment maker) jumped about 5.2%.
Tokyo Electron rose roughly 1.2%.
Lasertec and Advantest, key suppliers to semiconductor and testing industries, climbed around 2% and 0.6%, respectively. ^[10]

Bloomberg’s Asia wrap also noted that Japanese suppliers benefited from renewed optimism around AI chips after Nvidia secured permission to ship its H200 AI processor to China under certain conditions, boosting sentiment for the wider semiconductor ecosystem. ^[11]

Retail heavyweight takes points off the index

The day’s main drag was Fast Retailing, the parent of Uniqlo:

The stock fell about 1.4%, shaving roughly 79 points off the Nikkei due to its heavy weighting in the index. ^[12]

That pattern—chip makers up, heavyweight retailer down—echoes recent rotation. A preview from TechStock² earlier in the week noted that while the Nikkei is close to record highs, investors have become increasingly selective, with AI winners and real estate names attracting inflows while some large consumer names lag. TechStock²

Market breadth still soft

Even with the headline index in the green, breadth remained fragile:

Of 225 Nikkei constituents, 90 advanced, 134 declined and 1 was flat, according to Reuters’ tally. ^[13]

That breadth underscores the sense that Tokyo’s bull market is maturing: gains are increasingly driven by specific themes (AI, governance winners, exporters) rather than a broad-based melt‑up.

Macro backdrop: Fed “hawkish cut” fears meet BoJ hike odds

Fed decision: Relief cut, nervous guidance

Asia’s cautious tone on Tuesday was anchored in the US Federal Reserve’s policy meeting, with markets almost fully pricing a 25 basis point rate cut but worrying about what comes next.

Two Bloomberg‑based wraps (via SwissInfo and NDTV Profit) stressed that:

Global and Asian stock indices slipped as traders feared the Fed could pair the cut with a more hawkish tone on the 2026 easing path. ^[14]
US 10‑year Treasury yields pushed to their highest levels since September, extending a global bond sell‑off that has also lifted Japanese yields. ^[15]

For Tokyo, this matters in two ways:

Higher global yields raise discount rates for growth stocks—especially AI leaders that have driven much of Japan’s 2025 rally.
A stronger dollar / higher US yields versus a still‑weak yen can support exporters but complicates BoJ normalisation.

BoJ: Higher odds of a December hike to 0.75%

Markets also face an unusually eventful Bank of Japan decision later in December.

A Reuters piece on December 5 quoted Economic Revitalisation Minister Minoru Kiuchi saying that the choice of “specific policy means” is up to the BoJ, without opposing the idea of a near‑term rate hike. The article noted that markets now see the government accepting a move to 0.75% from 0.50% at the upcoming meeting. ^[16]
A detailed macro note from EBC Financial Group on Monday highlighted that despite a weak GDP revision (more on that below), overnight index swaps and futures still price roughly an 80% chance of a 0.25‑point hike at the 18–19 December meeting. ^[17]

In a December 1 speech in Nagoya, BoJ Governor Kazuo Ueda described Japan’s economy as having “recovered moderately,” emphasising that corporate profits remain high, exports are supported by AI‑related demand and real policy rates are deeply negative—even if nominal rates rise modestly. ^[18]

Takeaway: The BoJ is inching toward further normalisation, but it is trying to frame any hike as part of a gradual process rather than a sharp tightening cycle.

Japan’s GDP shock: Growth slowdown just before the BoJ meets

One of the main macro headwinds hanging over Tokyo today is the revised Q3 2025 GDP data:

Japan’s economy shrunk 0.6% quarter‑on‑quarter, worse than the initial ‑0.4% estimate and a ‑2.3% annualised contraction, the steepest since 2023, according to analysis of the revised Cabinet Office data by EBC. ^[19]
The breakdown showed weak capital expenditure and exports doing most of the damage, even as private consumption eked out a small gain. ^[20]

Ueda’s speech and EBC’s commentary both stress that:

The contraction is likely temporary, partly reflecting a “reactionary decline” after earlier front‑loaded exports and tariff effects. ^[21]
Inflation (ex‑fresh food) is still around 3% and expected to briefly dip below 2% before returning toward the BoJ’s target later in the forecast period. ^[22]

For Tokyo equity traders, the GDP print creates a classic tension:

Is the BoJ hiking into a slowdown, or simply normalising rates in a still‑resilient economy?

Tuesday’s modest Nikkei gain suggests the market is leaning toward the second interpretation—for now.

Earthquake jitters fade as markets focus back on policy

Tokyo also had to digest earthquake news.

Late Monday, a strong offshore quake in northeast Japan triggered tsunami warnings for parts of Aomori, Iwate and Hokkaido, before the weather agency lifted the warnings early Tuesday after reports of injuries but no catastrophic damage. ^[23]
Reuters’ Tokyo market piece noted that stocks “shrugged off” the quake, which ultimately caused only minor damage and no large tsunami, even though initial alerts rattled sentiment. ^[24]
Bloomberg’s regional wrap said construction and insurance names actually rose, as investors priced in reconstruction demand and manageable claims. ^[25]

By the time the cash session was in full swing on Tuesday, the quake had largely become background noise compared with Fed and BoJ risk.

Why global investors still like Japan: Structural bull case in focus

Despite near‑term nerves, global strategists remain broadly constructive on Japanese equities, and several fresh pieces of analysis dropped on or around December 9.

1. Japan vs US tech: 2025’s quiet outperformer

A feature in Money Magazine titled “Why Japan stocks outshine US tech” highlights just how strong Japan’s 2025 run has been: ^[26]

Several big Japanese names, including Advantest, SoftBank and Mitsubishi Heavy Industries, have outperformed Nvidia year‑to‑date, helped by AI, defence and industrial automation themes.
The TOPIX 100 has delivered roughly 24% in 2025 to early December, beating the Nasdaq Composite (~20%), the S&P 500 (~16%) and Australia’s ASX 200 (~7%).
Japanese households still keep around 51% of their assets in cash versus about 12% in the US, and only 18% in equities vs 55% for US households—leaving ample room for domestic money to rotate into stocks over time.

The article frames Japan as a rare mix of:

Global growth exposure (AI, semiconductors, autos, gaming, robotics).
Improving governance (buybacks, dividends, capital efficiency).
Attractive relative valuation, even after a big rally.

2. BofA’s targets have already been surpassed

Back in October, Bank of America raised its year‑end 2025 targets for Japanese indices, citing fiscal stimulus and political continuity under Prime Minister Sanae Takaichi: ^[27]

Nikkei 225 target: lifted from 45,000 to 49,000, with a “bull case” pointing toward 50,000.
TOPIX target: raised from 3,200 to 3,300, with upside to around 3,370 in a strong scenario.

As of today:

The Nikkei closed at 50,651.75, above BofA’s original 2025 target and even above their high‑end scenario. ^[28]
TOPIX, around 3,386, is just beyond the upper band of that forecast range. ^[29]

That means much of the “easy” target‑driven upside has already been realised, which helps explain why strategists now focus more on earnings growth and governance reforms than on re‑rating alone.

3. 2026 outlook: Still constructive, but more selective

Several recent 2026 outlooks paint a nuanced but broadly positive picture:

Invesco expects the Japan equity rally to broaden in 2026, moving beyond AI and semiconductor leaders to companies with stronger fundamentals across more sectors, supported by an ongoing push for corporate governance reforms by the Tokyo Stock Exchange and regulators. ^[30]
A Daiwa Asset Management note on November’s sell‑off points out that consensus EPS forecasts for TOPIX FY2026 have been revised higher, and that solid earnings, reforms and political support underpin a favourable medium‑term outlook despite volatility. ^[31]
An investment‑committee piece titled “Japan equity outlook 2026: A strong year ahead?” from Amova Asset Management argues that governance reforms and strategic policy set the stage for another constructive year, even if returns moderate from 2025’s pace. ^[32]
Capital Group cautions that the TOPIX 12‑month forward P/E is now near the top of its 15‑year range, meaning valuations are no longer cheap, but suggests structural improvements justify some premium. ^[33]

Not all views are outright bullish:

Standard Chartered notes Japan stocks have fallen around 6% in USD terms from recent peaks, with surging long‑term JGB yields and concerns about fiscal sustainability prompting the bank to prefer Asia ex‑Japan in the near term. ^[34]

And some quantitative models go even further:

A TradersUnion forecast built on statistical patterns suggests the Nikkei 225 could trade in the ¥61,000–63,700 range by end‑2026, though the site itself stresses that such projections are scenario‑based and subject to change. ^[35]

Bottom line for investors: The structural bull case for Japan is intact, but entry points and sector choices matter more now that indices sit above many mainstream 2025 targets.

Governance and stock selection: Nidec as a cautionary tale

Even in a strong market, not all stories are positive.

Nidec Corp, once a major index component, became a high‑profile reminder of Japan’s growing governance enforcement. Reuters reports that Nidec faced a “special alert” status from the Tokyo Stock Exchange over accounting concerns, had its results heavily revised and was removed from both the Nikkei 225 and, in stages, from TOPIX, triggering forced selling from index funds. ^[36]

For global investors, the Nidec episode underscores two key themes:

Governance reforms are real—and can cut both ways, rewarding high‑quality names while punishing weak controls.
Index composition is evolving, with room for new winners in sectors like semiconductors, industrial automation, renewables and defence to take greater weight.

Key themes to watch after today’s close

Heading into the Fed decision and the BoJ meeting, Tokyo traders are watching several overlapping storylines:

Fed tone – “dovish cut” or “hawkish cut”?
- A softer inflation outlook but divided Fed could mean slower‑than‑expected easing in 2026, keeping global yields high and capping valuation expansion for growth stocks. ^[37]
BoJ December move – hike and done, or the start of a path?
- Markets largely expect a 0.25‑point hike to 0.75%, but guidance on 2026 will matter more for the yen, JGBs and equity sector rotation. ^[38]
Yen and the carry trade:
- Analysts warn that a still‑weak yen near ¥155 plus higher Japanese yields is a “ticking time bomb” for leveraged carry trades; a surprise BoJ stance could trigger sharp FX moves that spill into equities. ^[39]
Domestic growth vs external shocks:
- The ‑0.6% Q3 GDP revision, tariff uncertainty and export weakness show that Japan is not immune to global trade frictions or US tariffs, even as AI demand supports high‑tech exports. ^[40]
Sector rotation and earnings quality:
- With forward P/E ratios stretched relative to history, strategists expect 2026 returns to depend more on earnings delivery, shareholder returns and balance‑sheet strength than on simple multiple expansion. ^[41]

What today’s move in Tokyo really says

Taken together, Tokyo stock market performance today sends a nuanced message:

The Nikkei 225 holding above 50,650 shows that investors are not panicking about GDP or quake headlines and still buy into Japan’s structural reform and AI narrative. ^[42]
Flat TOPIX and weak breadth reveal that money is clustering in specific leaders—especially semiconductors and governance winners—rather than embracing the entire market. ^[43]
Elevated bond yields, looming central‑bank meetings and a softer growth backdrop mean the risk‑reward skew is more balanced than earlier in 2025, when re‑rating alone could drive large gains.

For medium‑term investors, the Tokyo Stock Exchange remains one of the most closely watched equity markets in the world: a test case for how a former deflationary economy manages the transition to positive rates, real wage growth and shareholder‑friendly reforms without snuffing out its own bull market.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation or an offer to buy or sell any financial instrument. Always conduct your own research or consult a licensed financial adviser before making investment decisions.