Tokyo Stock Market Today, December 3, 2025: Nikkei 225 Rebounds Toward 50,000 as Tech Rallies and BOJ Jitters Cool

Tokyo – The Tokyo stock market snapped back on Wednesday, December 3, 2025, as the Nikkei 225 jumped 1.14% to close at 49,864.68, reclaiming much of Monday’s Bank of Japan–driven losses and briefly surging above the psychologically important 50,000 line. ^[1]

The rebound was powered by heavyweight technology and AI-related names such as Tokyo Electron, Advantest and SoftBank Group, even as broader market breadth remained negative and the more domestically focused Topix index slipped 0.2% to 3,334.32. ^[2]

Index recap: Nikkei up over 1%, Topix slips

According to official Nikkei data, the Nikkei 225 opened at 49,540.64, climbed to an intraday high of 50,138.60, and never fell below 49,521.23, before closing at 49,864.68 – up 561.23 points on the day. ^[3]

On the broader market:

Nikkei 225: 49,864.68, +1.14% (+561.23 points) ^[4]
Topix: 3,334.32, –0.20% (–6.74 points) ^[5]
Nikkei Volatility Index: 28.61, down nearly 5%, pointing to slightly calmer sentiment after Monday’s turmoil. ^[6]

The split personality of Wednesday’s session is striking. While the headline Nikkei, dominated by large exporters and tech names, marched higher, the Topix – which covers a far larger universe of issuers – actually ended in the red, reflecting weakness in banks, utilities, and some defensive names. ^[7]

Market breadth underscores the divergence: declining stocks outnumbered gainers by roughly 2-to-1 (2,402 vs. 1,159), with 257 issues unchanged on the Tokyo Stock Exchange. ^[8]

In other words: index-level strength was heavily concentrated in a handful of large-cap winners rather than broad-based buying.

From BOJ panic to partial relief: the week so far

Wednesday’s bounce comes after a roller-coaster start to December:

Monday, 1 December – Tokyo suffered a sharp sell-off after Bank of Japan Governor Kazuo Ueda signaled that a rate hike would be considered at the December 18–19 policy meeting.
- Nikkei fell 1.89%, losing 950.63 points to close at 49,303.28.
- Topix dropped 1.19% to 3,338.33.
- The 10‑year JGB yield spiked to roughly 1.87%, the highest since 2008, while the yen strengthened into the mid‑155 per dollar. ^[9]
Tuesday, 2 December – A fragile pause:
- Nikkei finished almost flat at 49,303.45, up just 0.17 point.
- Topix inched up 0.08% to 3,341.06 on modest bargain-hunting. ^[10]
Wednesday, 3 December – Relief rally:
- Nikkei reclaimed more than half of Monday’s loss, driven by tech and growth stocks, and briefly pushed above 50,000 before closing just below. ^[11]

Global markets also calmed. A Reuters global markets wrap noted that world equities steadied as bond and crypto sell-offs paused, with Japan’s Nikkei up about 1.5% intraday and Asian benchmarks outside Japan lagging as Chinese shares remained weak. ^[12]

Tech and AI names power the Nikkei higher

Chipmakers, equipment suppliers and SoftBank lead

The day’s rally in Tokyo was all about technology, semiconductors, and AI exposure:

An Associated Press roundup reported that Tokyo Electron climbed roughly 4.7%, while Advantest surged about 5.3%, as investors rotated back into chip and testing equipment makers following a strong tech session on Wall Street. ^[13]
SoftBank Group – a heavily watched proxy for AI and private tech bets – jumped around 6.4%, helped by reports that founder Masayoshi Son regrets selling a large Nvidia stake earlier this year, which markets interpreted as renewed confidence in the AI cycle. ^[14]

Investing.com data show that Dainippon Screen (Screen Holdings) was among the top Nikkei performers, rising nearly 8%, alongside Lasertec (+7%+) and Ebara (+6%+), cementing a strong day for high‑beta industrial technology and chip-related plays. ^[15]

Laggards: retail, pharma and utilities under pressure

Not everything participated:

Aeon slumped about 6.7%,
Daiichi Sankyo lost just over 4%, and
Osaka Gas fell a little over 3%,
making them some of the worst names on the Nikkei 225. ^[16]

Sector-wise, real estate, banking, and textiles were cited as leading groups in the Investing.com session summary, yet overall breadth remained negative – a sign that gains were skewed toward a cluster of index heavyweights. ^[17]

Finimize’s Asia briefing framed the day as a “Nikkei up, banks and autos down” story: chipmakers and exporters benefitted from the global tech rebound and slightly softer U.S. yields, while financials and automakers stayed under pressure from elevated domestic yields and a firmer yen. ^[18]

BOJ rate hike still looms: yields at 17‑year highs

Despite the rebound in Japanese equities, bond markets remain on edge.

Reuters reported that the 10‑year Japanese government bond yield hit about 1.885% on Wednesday, the highest level since 2008, as traders continued to price in a Bank of Japan rate hike later this month. ^[19]
The two‑year JGB yield hovered just above 1.0%, reflecting expectations that the BoJ’s policy rate – currently at 0.5% after the January normalization – could be lifted again to around 0.75% in coming months. ^[20]

Governor Ueda’s comment that the BoJ will “consider the pros and cons of raising rates” at the December meeting has left markets assigning a high probability – roughly 80% according to Reuters – that a hike is coming. ^[21]

At the same time, global rate expectations turned more dovish:

Futures markets and multiple strategist notes point to a high likelihood of a U.S. Federal Reserve rate cut next week, with some analysts citing probabilities above 80–85% for a 25‑basis‑point move. ^[22]
In currency markets, the dollar slipped modestly against the yen to around ¥155.6, mirroring the more cautious stance on U.S. rates even as JGB yields climb. ^[23]

Mizuho Bank strategist Tan Boon Heng, cited in AP coverage, argued that not hiking on December 19 could spark renewed selling of the yen, but also cautioned that delivering a hike that markets already treat as a done deal might simply push long‑term Japanese yields higher without giving the currency much new support. ^[24]

Domestic backdrop: services stay strong, stimulus kicks in

Underneath the market volatility, Japan’s real economy is flashing a mix of resilience and strain.

A fresh S&P Global Japan Services PMI reading for November came in at 53.2, edging up from 53.1 in October and marking the eighth straight month of expansion. ^[25]

Key points from the PMI report:

Growth was driven by domestic demand, with new orders rising at a faster pace, even as export sales fell for a fifth month in a row. ^[26]
Employment in services rose at its fastest rate since January, and business confidence improved, suggesting companies still see solid demand ahead. ^[27]
Input costs – especially wages, energy, and construction materials – climbed at the sharpest pace in six months, though firms eased back slightly on price increases to customers. ^[28]

The composite PMI, which blends manufacturing and services, rose to 52.0, indicating that the services sector is helping offset weaker factory output. ^[29]

Supporting the outlook, Reuters noted that new Prime Minister Sanae Takaichi’s government has just approved a 21.3 trillion yen (about $137 billion) stimulus package aimed at reviving growth after Japan’s GDP contracted in the third quarter. ^[30]

For equity investors, this combination of solid services activity plus fiscal support, on top of a potential Fed easing cycle, is a key reason why many strategists still see room for Japanese stocks to hold up even as domestic rates creep higher.

Global context: risk appetite rebuilds after Monday’s shock

Wednesday’s Tokyo session can’t be understood in isolation.

Across global markets:

A Reuters “markets wrap” piece highlighted how global equities regained their footing after Monday’s sell-off, with U.S. futures modestly higher and European markets opening in the green. ^[31]
Bitcoin, whose slump earlier this week had become a shorthand for “risk-off” sentiment, bounced back above $90,000 (AP and Reuters put it around $93,000–94,000), helping stabilize broader risk assets. ^[32]

Bloomberg commentary carried by Swissinfo described Asian stocks as trading in “tight ranges,” with Japan’s Topix down 0.2% even as semiconductor names outperformed, and emphasized that investors remain cautious ahead of upcoming U.S. data (ADP employment, PCE inflation) and back-to-back Fed and BoJ meetings. ^[33]

What analysts and strategists are saying

Short-term: seasonal tailwinds vs. policy risk

Several strategist notes published on December 3 strike a similar tone:

A global market strategist at IG, quoted by Reuters, said he sees little reason why equities cannot stay well supported into next week’s expected Fed rate cut, and pointed to mid‑December as a “sweet spot” historically associated with equity rallies. ^[34]
Vantage Markets’ Hebe Chen told Bloomberg that the “sky isn’t clear enough” for a broad, carefree rally, given how much hinges on the upcoming U.S. inflation data and the cluster of central-bank decisions. ^[35]
AT Global Markets’ Nick Twidale warned that with market expectations now heavily skewed toward a dovish Fed, any upside surprise in U.S. data could force a swift correction in risk assets, including Japanese equities. ^[36]

For Tokyo specifically, the message is:
Seasonal patterns and global easing hopes are bullish, but policy event risk is unusually high.

BOJ path and the yen: a pivotal variable for Japan stocks

On the Japan side, analysts see three intertwined drivers for the Tokyo stock market over the next few weeks:

The December 18–19 BoJ meeting
- Markets are now pricing a strong chance of another rate hike. Ueda’s own comments, plus persistent inflation above target and ongoing wage pressures, support that view. ^[37]
The yen’s reaction
- If the BoJ hikes and hints at a more sustained normalization path, the yen could strengthen further, weighing on exporters and tech, even as it reduces imported inflation.
- If the BoJ disappoints or signals a very gradual path, the yen may weaken again, potentially supporting exporters but risking renewed imported inflation and keeping yields volatile. ^[38]
Global carry trades and foreign flows
- As Reuters noted, the combination of narrowing rate differentials between the U.S. and Japan and rising JGB yields has raised fears of unwinding yen-funded carry trades, which can amplify moves in both Japanese assets and global risk markets. ^[39]

Put simply, Tokyo’s fate in the near term is tied as much to central-bank choreography as to corporate fundamentals.

Technical picture: Nikkei still in uptrend but flashing pockets of overbought

On the technical side:

The official Nikkei index data show the benchmark retesting the 50,000 region, with Wednesday’s high above 50,100 and a close only about 0.3% below that psychological line. ^[40]
Technical summaries for Nikkei futures compiled by Investing.com around mid‑session flagged:
- A neutral-to-positive overall signal,
- A MACD “buy” indication, and
- Short‑term oscillators, such as stochastics and Williams %R, in overbought territory, suggesting the index may be stretched in the very short run. ^[41]

Meanwhile, the Topix has clearly lagged, closing around 1.3% below last Friday’s level, even after Wednesday’s Nikkei rebound. ^[42]

For institutional investors, that divergence between headline Nikkei strength and softer, broader Topix performance is a key theme:

It implies the rally is concentrated in large-cap tech, AI and select exporters.
It also suggests that higher domestic yields are starting to bite more interest‑rate‑sensitive parts of the market, like banks, utilities and smaller domestic cyclicals. ^[43]

What to watch next for Tokyo stocks

Looking beyond today’s close, several catalysts loom large for the Tokyo stock market:

U.S. Economic Data (this week)
- ADP employment, PCE inflation and other delayed data will shape expectations for the December Fed decision and the broader 2026 U.S. rate path. A surprise on inflation or jobs could jolt global risk sentiment. ^[44]
Federal Reserve Meeting (next week)
- Markets currently price in a high probability of another Fed rate cut. A cut paired with dovish guidance tends to support global equities, including Japan; a more hawkish tone could reverse some of today’s optimism. ^[45]
Bank of Japan, December 18–19
- Traders will focus not just on whether the BoJ hikes, but on:
  - The scale and cadence of any future moves,
  - Updated economic projections, and
  - Comments on JGB purchases and balance-sheet policy, which directly affect yields. ^[46]
Wage and inflation data heading into 2026
- With services price pressures and wage gains still building, any sign that Japan is moving closer to a self-sustaining 2%+ inflation regime will reinforce the case for gradual normalization – a mixed but ultimately structural positive for Japan Inc. if handled carefully. ^[47]
Earnings guidance from key Nikkei constituents
- Tech giants, automakers and megabanks will play outsized roles in how the index behaves from here, especially given the narrow leadership seen in Wednesday’s trade.

Bottom line: A relief rally, not a full‑clear signal

Today’s Tokyo stock market session delivered a powerful relief rally in the Nikkei 225, fueled by tech and AI‑linked heavyweights and supported by calmer global risk sentiment.

But under the hood:

Topix declined,
Market breadth was negative, and
Bond yields climbed to highs not seen since before the global financial crisis. ^[48]

That combination suggests investors are selectively buying quality growth and tech while staying cautious on the broader market ahead of a pivotal stretch of central‑bank decisions. For now, Tokyo’s bulls have the upper hand again – but the true test will come later this month, when the Fed and the BoJ finally put policy to the test.

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a qualified financial advisor before making investment decisions.