Tokyo Stock Market Today, December 4, 2025: Nikkei 225 Leaps Above 51,000 as AI Rally and BOJ Rate Hike Bets Collide

Tokyo’s stock market delivered another powerful move higher on Thursday, December 4, 2025, as investors piled into artificial intelligence and robotics names even while long‑term interest rates in Japan hit their highest levels in nearly two decades and expectations for a Bank of Japan (BOJ) rate hike intensified.

At the close, the Nikkei 225 jumped 1,163.74 points, or about 2.33%, to 51,028.42, while the broader TOPIX index rose 1.92% to 3,398.21, an all‑time closing high. ^[1] Tokyo was one of the standout gainers in Asia and pushed near its own record as global risk appetite improved on growing hopes that the U.S. Federal Reserve will cut rates next week. ^[2]

The overview below pulls together today’s key Tokyo stock market moves, global context, and fresh forecasts and analyses published on December 4, 2025.

Tokyo stock market today: key numbers at the close

Nikkei 225: 51,028.42
- Change: +1,163.74 points (+2.33%) vs. Wednesday’s close. ^[3]
TOPIX: 3,398.21
- Change: +63.89 points (+1.92%), marking a record closing high for the index. ^[4]
Intraday path: The Nikkei opened around 49,943, extended gains back above the 50,000 mark early in the session and then accelerated to finish above 51,000. ^[5]
Streak: Today’s rally marked at least a second straight day of gains as Japanese shares continued to recover from a bout of bond‑market‑driven volatility earlier in the week. ^[6]

On the Tokyo Stock Exchange Prime Market, issues tied to wholesale trade, information and communication, and securities houses were among the main winners, reflecting strong demand for tech, AI and brokerage names. ^[7]

AI and robotics power the Nikkei’s surge above 51,000

Today’s advance in Tokyo was overwhelmingly led by artificial intelligence and robotics‑linked stocks, echoing the powerful moves in U.S. tech shares overnight.

Key movers included:

Fanuc Corp. – The industrial robot maker’s shares soared about 13% to ¥5,953, making it one of the biggest contributors to the Nikkei’s gain. ^[8]
Yaskawa Electric – Another robotics and automation leader, jumped roughly 11% to ¥4,769. ^[9]
SoftBank Group – Seen globally as a proxy for AI and tech risk sentiment, SoftBank surged roughly 7–9%, depending on the quote source, helping pull the broader market higher as foreign investors chased Japan’s tech story. ^[10]
Chips and equipment: Advantest and Tokyo Electron gained in the mid‑single digits, reflecting ongoing optimism around semiconductor demand and AI hardware investment. ^[11]

International coverage repeatedly highlighted that Tokyo’s rally is being driven by AI, chips and tech heavyweights, with SoftBank and major semiconductor names among the most actively traded stocks. ^[12]

At the sector level, the dominance of information & communication and securities issues underscores how much of today’s advance was tied to growth stocks, trading activity and digital infrastructure rather than old‑economy cyclicals. ^[13]

Bond yields hit 18‑year highs even as equities rally

The strength in Japanese equities came against a striking backdrop in the bond market:

The yield on the 10‑year Japanese government bond (JGB) climbed to around 1.93–1.935%, its highest level in roughly 18½ years and the most elevated since mid‑2007. ^[14]
A key 30‑year JGB auction drew the strongest demand in more than six years, easing immediate fears after a sharp sell‑off in super‑long‑dated bonds earlier this week and nudging long‑term yields off their extremes. ^[15]

Market participants and official commentary suggest several drivers:

Expectations are building that the BOJ will raise its policy rate from 0.5% to around 0.75% at its December 18–19 meeting, with some analysts now treating a December hike as almost a base case. ^[16]
Concerns are mounting that Prime Minister Sanae Takaichi’s expansive fiscal stance, including a stimulus package exceeding ¥20 trillion, will require heavy issuance and test investors’ appetite for Japanese debt. TechStock²+2Adnkronos English+2

Jiji Press reporting via Adnkronos noted that officials in Tokyo are “closely monitoring” the spike in long‑term yields, even as equity investors appeared willing to look past the bond market stress for now and focus on AI‑driven growth stories and global risk appetite. ^[17]

Crucially, the TOPIX’s record close suggests that investors still see Japan as a reflation and reform story, despite the rapid repricing in government bonds. Foreign inflows into Japanese shares this quarter are estimated in the trillions of yen, supported by robust earnings and ongoing corporate governance reforms. ^[18]

BOJ December hike bets: what analysts are saying today

Several fresh analyses and commentaries published on December 4 paint a consistent picture: markets are bracing for a BOJ rate hike this month, with the debate shifting to how far and how fast policy will tighten from here.

Policy rate: 0.75% in sight

Reports citing government and BOJ sources suggest a high probability that the policy rate will be lifted to 0.75%, marking another step away from ultra‑low settings. ^[19]
An analysis from AInvest notes that markets are pricing roughly an 80% chance of a December hike, while also highlighting that the central bank remains cautious given Japan’s 230% debt‑to‑GDP ratio and a 0.4% annualised GDP contraction in Q3. ^[20]

“Neutral rate” uncertainty and JGB reaction

In a widely discussed speech earlier this week, Governor Kazuo Ueda said the BOJ does not yet know the precise “neutral rate”—the level of interest that neither stimulates nor restrains the economy. That comment, analyzed in detail by FX strategists on Thursday, was enough to: ^[21]

Push 10‑year JGB yields to around 1.91–1.93%;
Lift the yen toward ¥155.5 per dollar;
Reinforce expectations that December may be just the start of a longer, albeit cautious, tightening cycle.

Commentary from market strategists today frames this as an early blueprint for a more conventional rate regime in Japan. The BOJ is trying to normalize policy while inflation edges above 2% and wage growth shows signs of life, but without triggering a disorderly bond sell‑off or a sharp economic slowdown. ^[22]

Yen firms toward 155 as carry‑trade nerves linger

Currency markets have been quick to react to the evolving BOJ narrative:

The Japanese yen strengthened toward ¥155 per U.S. dollar, trading near its firmest levels in more than two weeks as rising domestic yields narrow the gap with U.S. rates and prompt some unwinding of yen‑funded carry trades. ^[23]
Analysts at Investing.com and other outlets stressed that even modest BOJ tightening can produce outsized reactions because positioning has been heavily skewed toward permanently low Japanese rates. ^[24]

For equities, a stronger yen is a double‑edged sword:

It pressures exporters and automakers, which rely on overseas earnings (a risk flagged repeatedly in pre‑market Tokyo outlooks). TechStock²+1
It supports domestic consumption by lowering imported inflation, which can help retailers, travel and service‑sector names over time. TechStock²+1

So far, the AI and chip boom has overshadowed FX worries, but strategists warn that a further rapid yen advance—especially if 10‑year JGB yields were to push decisively above 2%—could quickly rotate leadership away from high‑duration growth stocks toward banks and more defensive names. ^[25]

Global backdrop: Fed cut hopes fuel Tokyo’s risk appetite

Tokyo’s advance today cannot be separated from the global macro narrative:

Weak U.S. labor data earlier in the week reinforced expectations that the Federal Reserve will cut its key rate by 25 basis points at next week’s meeting, with futures markets pricing an implied probability close to 90%. ^[26]
The S&P 500 has risen in most of the past eight sessions and is trading close to record territory, while the Russell 2000 small‑cap index and key European benchmarks also moved higher. ^[27]
Asian markets were mixed on Thursday, but Japan stood out: AP’s global wrap highlighted Tokyo as one of the main gainers, with SoftBank’s surge singled out as a major driver. ^[28]

This combination—a potentially dovish Fed and a gradually more hawkish BOJ—creates a nuanced environment:

It supports global equity risk appetite, encouraging foreign investors to keep rotating into markets with strong earnings and reform stories, such as Japan. TechStock²+1
At the same time, it tightens financial conditions in Japan via higher JGB yields and a stronger yen, particularly relevant for rate‑sensitive sectors and export‑heavy industries. ^[29]

Market breadth and sector performance beneath the headline rally

Beneath the impressive index‑level move, today’s session continued a pattern that analysts have been flagging all week:

Leadership is narrow: A relatively small group of AI, chip and tech conglomerates are doing much of the heavy lifting, while more rate‑sensitive names have lagged in recent sessions. TechStock²+1
Prime Market winners: According to exchange data, wholesale trade, information & communication, and securities houses were the strongest sectors, consistent with robust trading volumes and the tech‑led theme. ^[30]
Financials and exporters: Banks and insurers remain in a tricky spot—higher yields can eventually help lending margins, but the speed of the move in JGBs raises mark‑to‑market risks. Exporters and autos, meanwhile, are still sensitive to any further yen strength. TechStock²+2Investing.com UK+2

From a flows perspective, fresh data show foreign investors have been net buyers of Japanese equities this quarter, with estimated inflows of around ¥7.2 trillion, as international managers continue to cite reforms, earnings and AI exposure as reasons to stay constructive on Japan. ^[31]

Economic backdrop: services strength, stimulus and structural reform

Today’s equity market story is also rooted in shifting macro fundamentals:

The Japan Services PMI for November came in around 53.2, marking an eighth consecutive month of expansionand signalling solid domestic demand, especially in services employment and new orders. TechStock²+1
The composite PMI (blending manufacturing and services) rose to about 52.0, indicating moderate but persistent overall growth despite a negative Q3 GDP print. TechStock²+1
Prime Minister Takaichi’s government has approved a ¥21.3 trillion stimulus package aimed at cushioning households from cost‑of‑living pressures and supporting growth after the Q3 contraction. TechStock²+1

Strategists argue that this mix—reflation, structural reforms and still‑supportive global liquidity—helps explain why foreign investors have been willing to look past bouts of bond‑market turbulence and focus on Japan as a long‑term allocation, particularly in high‑quality tech, automation and domestically oriented service names. TechStock²+2The Economic Times+2

Outlook: what to watch next for Tokyo stocks

Based on today’s news flow, commentaries and forecasts published on December 4, several key catalysts will shape the Tokyo stock market in the days and weeks ahead:

BOJ’s December 18–19 meeting
- The central bank is widely expected to raise its policy rate to around 0.75%. Markets will scrutinize the tone on future hikes, the projected terminal rate (some estimates cluster near 1.5%), and any guidance on JGB yield management. ^[32]
Further JGB auctions and yield moves
- Today’s strong 30‑year auction calmed nerves, but analysts warn that a renewed spike in super‑long yields could quickly spill back into equities—especially financials, REITs and highly valued tech. ^[33]
Fed decision and U.S. data
- A widely expected Fed rate cut next week is currently supporting global equities. Any upside surprises in U.S. growth or inflation data before or after the meeting could challenge that narrative, push U.S. yields higher again and test risk sentiment in Tokyo. ^[34]
USD/JPY and carry‑trade positioning
- Moves away from the ¥155 area—especially any break toward ¥150—would have important implications for exporter earnings, foreign investor returns and the broader risk backdrop. ^[35]
Sector rotation and market breadth
- Analysts are watching for signs that today’s AI‑and‑chips‑dominated rally broadens to include banks, domestically focused names and laggard value stocks. If leadership remains narrow, volatility could increase around central‑bank events or macro surprises. TechStock²+2Trading Economics+2

Bottom line

On December 4, 2025, the Tokyo stock market delivered a textbook “good news/bad news” rally:

Good news: AI and robotics names, along with chipmakers and tech conglomerates like SoftBank, powered the Nikkei 225 above 51,000, while the TOPIX set a new record, supported by strong foreign inflows, resilient services data and sizeable fiscal stimulus. ^[36]
Bad news—at least potentially: Long‑term JGB yields at 18‑year highs, a firming yen and mounting BOJ hike expectations underscore how quickly Japan’s cost of capital is changing after years of near‑zero rates. ^[37]

For now, AI optimism and global risk appetite are firmly in the driver’s seat, but as multiple analyses published today stress, Tokyo’s rally is happening on a narrowing ledge of market leadership and with bond and FX markets flashing caution.

As always, this overview is for information purposes only and does not constitute investment advice. Investors should consider their own objectives and risk tolerance and consult professional advisers before acting on any of the themes described above.