[Weekly Market Note] Policy interest rates held steady in both Japan and the US; Nikkei up 0.95% for the week, with a 1,369 yen drop on Friday / This week: US midterm elections …

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Last week (10/26–10/30), the central bank meetings for both the United States and Japan took place in the same week. In both cases, the policy interest rate (the rate set by the central bank) remained unchanged.

The Nikkei Stock Average (an index based on the stock prices of 225 representative Japanese companies) rose by 596 yen for the week, marking its first positive week in three. However, as of Thursday, it was up by 1,966 yen. It lost about 70% of that gain in a single day on Friday.

In this report, we will look back at last week in the order of Japanese stocks, US stocks, and the Bank of Japan.

📊 Last week’s summary (10/26–10/30)

✅ The Nikkei Stock Average was 63,290.11 yen, up 596.95 yen (+0.95%) for the week. The TOPIX (Tokyo Stock Price Index), which is calculated using a broader range of stocks on the Tokyo Stock Exchange, was 3,965.07, down 0.02% for the week, remaining almost flat.

✅ US stocks saw all three major indices finish the week in the negative. The Dow Jones Industrial Average, consisting of 30 companies, was down $444.85 (-0.85%) to $51,770.31. The S&P 500, consisting of 500 companies, was down 0.57% to 7,580.07, and the tech-heavy Nasdaq Composite was down 2.00% to 25,437.00.

✅ The dollar-yen exchange rate moved from 156.87 yen at the New York close on 10/23 to 157.56 yen at the New York close on 10/30. For the week, the yen weakened by 69 sen.

🔥 Top 3 topics of last week

1. The Nikkei Stock Average rose 2,469 yen over three days, then fell 1,369 yen on Friday

First, here are the daily closing prices (official Nikkei Stock Average data. Figures in parentheses represent the difference from the previous day).

• 10/26 (Mon) 62,189.65 yen (-503.51 yen)

• 10/27 (Tue) 63,268.37 yen (+1,078.72 yen)

• 10/28 (Wed) 63,954.19 yen (+685.82 yen)

• 10/29 (Thu) 64,659.47 yen (+705.28 yen)

• 10/30 (Fri) 63,290.11 yen (-1,369.36 yen)

On the 26th, selling continued in AI and semiconductor stocks (MINKABU PRESS, FISCO). On the 27th, AI and semiconductor stocks were bought back after the US AI company Anthropic released its IPO filing (MINKABU PRESS, FISCO). A rebound from the declines seen up to the previous day also played a role (FISCO).

On the 28th, strong earnings from South Korea’s SK Hynix provided a tailwind (MINKABU PRESS, FISCO). On the 29th, Advantest, a manufacturer of semiconductor testing equipment, raised its earnings forecast and was bought, with this single company pushing the Nikkei Stock Average up by approximately 453 yen (MINKABU PRESS, FISCO). Calculated, this accounts for about 64% of the total gain.

The decline on the 30th was primarily due to selling in AI and semiconductor stocks following the earnings reports from Amazon and Intel released after the US market closed the previous day (MINKABU PRESS, FISCO, DZH). The day’s low was reached before the Bank of Japan’s announcement (at 12:02 PM) (FISCO).

On this day, the top five stocks that pushed the Nikkei Stock Average down accounted for approximately 1,265 yen (MINKABU PRESS). Calculated, this accounts for about 92% of the total decline.

Here is one personal perspective.

In my previous note, I gave a 3-star rating to the central bank meetings in the US and Japan, and a 2-star rating to corporate earnings. Looking back, the main reasons cited for the Nikkei Average’s fluctuations between the 28th and 30th were the earnings of companies in South Korea, Japan, and the US. As far as price movements go, I think the star ratings could have been reversed.

② The US market rose in the first half of the week and fell on Thursday and Friday

All three indices rose during the first three days of the week. The Nasdaq Composite was up 594 points through Wednesday.

The results of the FOMC (the meeting of the US Federal Reserve) were released at 3:00 AM Japan time on the 29th. The interest rate was held steady at 3.75–4.00%, with a 10-to-2 vote. Both of the two dissenting members had called for a rate hike (FRB). Regarding the market on the 28th local time, MINKABU PRESS reported that it “passed without incident.”

The shift to a decline began with the subsequent earnings reports. On the 29th local time, Alphabet (Google’s parent company) shares fell 12.64% (CNBC). Concerns about whether the massive investment in AI would yield commensurate revenue were cited as the reason (MINKABU PRESS, FISCO).

On the 30th local time, Intel shares fell 28.58% (CNBC). Reasons cited included weak demand for PC semiconductors (MINKABU PRESS, FISCO). The SOX semiconductor index fell 7.20% (CNBC). Amazon plummeted in after-hours trading following the close of regular trading, but recovered to end 1.41% lower (CNBC).

The Nasdaq Composite fell 1,112 points over Thursday and Friday, resulting in a 518-point loss for the week.

③ The Bank of Japan held rates steady; notable was the language regarding its view on prices

The Bank of Japan also held its policy rate steady at around 1.25% on the 30th. The vote was 8-to-1, with Board Member Takata proposing a hike to 1.5% (Bank of Japan).

The notable change was in the wording. While the September decision statement described the underlying trend of prices (the trend after smoothing out temporary movements) as “approaching 2%,” this time it wrote that it is “at a level generally consistent with the ‘price stability target’ of 2%” (Bank of Japan). This phrasing indicates that it is currently at a level generally in line with the 2% target. It is reported that this is the first time such a judgment has been made since the target was introduced in 2013 (MINKABU PRESS, ANN).

While Governor Ueda described this as “a milestone,” he is also reported to have said that the target has not yet been achieved (ANN, Reuters). Regarding the next rate hike, he used the phrasing that it would be judged “at each decision-making meeting, including the next meeting” (DZH, MINKABU PRESS).

The reaction in the foreign exchange market was small. The dollar-yen pair briefly moved toward a stronger yen, reaching 157.12 yen immediately after the announcement, but did not move much around the time of the press conference (MINKABU PRESS, DZH). Japan’s long-term interest rate (10-year government bond yield) was 2.770%, 0.065 points lower than the previous day (DZH).

📅 Three major points to watch this week (11/2–11/6)

(The number of stars is a subjective measure of importance)

★★★ 11/3 (Tue) US Midterm Elections

This is the election to choose members of Congress. Many view the Democratic Party as having the advantage, and it is reported that the general outcome will be known by the afternoon of the 4th, Japan time (MINKABU PRESS). I want to see how the US stock market reacts to the results. In Japan, it is Culture Day, and the Tokyo Stock Exchange is closed.

★★★ 11/6 (Fri) 22:30 US October Employment Statistics

These are monthly statistics showing the number of employed people and wages in the US (US Bureau of Labor Statistics). Last week, there were statements from senior Fed officials that additional rate hikes are necessary (DZH, MINKABU PRESS), and I am particularly interested in watching wage growth before the Fed’s December meeting. Note that the US switched to winter time on November 1st, so the announcement of indicators will be delayed by one hour in Japan time (DZH, Kabutan).

★★ 11/5 (Thu) Earnings for Toyota, Nintendo, and Sony Group

Since Wednesday of last week, corporate earnings have been frequently cited as the reason for market movements. Earnings announcements will continue in Japan this week as well. In addition to Toyota, Nintendo, and Sony Group on the 5th, Mitsubishi Corporation and NTT are scheduled for the 4th (according to Kabutan and MINKABU PRESS schedules; please confirm Toyota’s date via company announcements). In the US, Apple is scheduled for the 2nd (local time) (according to the MINKABU PRESS schedule).

Other events for this week

• 11/2 (Mon): 14:00, full text of the Bank of Japan’s Outlook Report (a document summarizing the outlook for the economy and prices) (Bank of Japan)

• 11/5 (Thu): 8:50, Bank of Japan minutes (a document summarizing the discussions from the September meeting) (Bank of Japan). 21:00, Bank of England (UK central bank) policy decision (DZH/Kabutan)

• 11/7 (Sat): Around 1:00, Governor Ueda to speak at the IMF (Bank of Japan)

• All times are in Japan Standard Time.

💡 Economic term of the week: “Employment Cost Index (ECI)”

This is a figure that was released in the US on the 30th of last week. Since wage figures will also be released in this week’s employment statistics, they are often viewed side-by-side.

What is the Employment Cost Index?

It is a figure released every three months by the US Bureau of Labor Statistics that shows changes in the cost of hiring people. It includes not only wages but also benefits. It is calculated by excluding the effects of changes in the composition of occupations and industries (US Bureau of Labor Statistics).

Last week’s figures

For July-September, it rose 0.8% compared to the previous three months, which was in line with expectations (US Bureau of Labor Statistics, Fisco, MINKABU PRESS).

Compared to 12 months ago, it is a 3.4% increase. However, when excluding the rise in prices, it is a 0.4% decrease (US Bureau of Labor Statistics).

Things to keep in mind when looking at this

Even if I hear that wages have gone up, I personally don’t think we can say whether life has become easier until we compare that with how prices have risen.

🎯 Closing

Last week, policy interest rate decisions in both Japan and the US were announced, but corporate earnings were frequently cited as the reason for market movements from Wednesday onwards. I intend to watch how the changes in the Bank of Japan’s language will lead to their next decision at the upcoming meeting on December 17th and 18th.

This week, the Tokyo Stock Exchange will be closed on Tuesday, resulting in a four-day trading week. In the US, the election will take place on Tuesday, followed by employment statistics on Friday.

See you next time! 👋

※ This article is for informational purposes only and does not recommend the purchase or sale of any specific financial products. Please make investment decisions at your own risk.

A detailed summary of the previous day’s market is also written in “Okane Bye-Bye Man’s Economic News” (https://okanebye-man.com).

ichido-studio | Weekly Market Note | Sunday, November 1, 2026