[November 4] Today's Stock Market Report: Nikkei Average Sees Dramatic V-Shaped Rebound of Over 2,000 Yen After Plunging Over 3,000 Yen!

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The US midterm election ‘Blue Wave’ and Trump’s concession, the selling climax where the 25-day moving average exceeded an 8% decline, and the major reversal triggered by Mitsubishi Corporation’s ‘1 trillion yen share buyback.’ No blind spots in the AI bubble.

• Nikkei Stock Average Closing Price : 62,188.63 yen (-893.23 (-1.42%))

• TOPIX : 3,895.38 points (-34.90 (-0.89%))

• Trading Value (TSE Prime) : 10.085572 trillion yen

• Number of advancing stocks: 425 / Number of declining stocks: 1084/ Unchanged stocks: 43

• External Market Environment: Although the Democratic Party won both the House and Senate in the US midterm elections (Blue Wave), uncertainty was cleared by Mr. Trump’s straightforward concession.

• Note: Kyocera, Fujikura, and Kioxia fell. On the other hand, Fast Retailing and Mitsubishi Corp rose.

1. Market Close: A great survival from the brink of the 60,000 yen level (60,030 yen)! A selling climax with trading value exceeding 10 trillion yen.

November 4, 2026 (Wednesday), the Tokyo stock market, which reopened after the Culture Day holiday, became a historic volatile market swayed all day by the vote-counting reports of the “US midterm elections” held the previous day (US time, November 3). The Nikkei Stock Average, which saw selling from immediately after the opening, rapidly expanded its decline as the probability increased that the opposition Democratic Party would achieve a “Blue Wave (Democratic landslide)” by winning not only the House but also the Senate in the US midterm elections. After entering the afternoon session, past 1:00 PM (13:00), the decline temporarily exceeded 3,000 yen, plunging to 60,030 yen, the lowest price of the day, and was driven to the brink of falling below the psychological defense line of the “60,000 yen level”.

However, after 1:00 PM, when it barely defended the 60,000 yen level, the market landscape changed dramatically.

First, because the Nikkei Stock Average was sold down to the verge of 60,000 yen, the downward deviation rate from the 25-day moving average clearly exceeded the “minus 8%” which is considered the limit for a normal adjustment phase, and a decisive “oversold signal (selling climax)” lit up on the chart. Second, at that very bottom-range timing, US President Trump straightforwardly announced a “concession (statement)” for the Republican Party’s defeat in the midterm elections, clearing the risk of prolonged political chaos over the election results. And third, at 2:00 PM (14:00), Mitsubishi Corporation, the leader among general trading companies, announced its financial results along with a surprise “ultra-huge share buyback with a cap of 1 trillion yen”, which has no precedent in the history of Japanese stocks except for Toyota Motor and Honda.

Because these four reversal catalysts miraculously overlapped, a fierce short covering (buying back of short sales) and real-demand dip buying exploded from the middle of the afternoon session. The Nikkei Stock Average rapidly rebounded by over approximately 2,150 yen from the bottom price of 60,030 yen, and finished the trading session having recovered more than two-thirds of the decline.

The closing price of the Nikkei Stock Average was 62,188.63 yen, down 893.23 yen from the previous business day (minus: 1.42%), marking the third consecutive day of decline (3-day losing streak). Although it was the lowest level in about three months since July 30 on a closing basis, it achieved a dramatic survival from the panic of a decline of over 3,000 yen during the day.

On the other hand, the closing price of the TOPIX (Tokyo Stock Price Index), which is composed of a wide range of stocks on the TSE Prime Market, was 3,895.38 points, down 34.90 points from the previous business day (decline rate: 0.89%), marking a 3-day losing streak and ending below 3,900 points for the first time since June 12.

The trading value of the TSE Prime Market reached 10.085572 trillion yen (estimated trading volume of 3.51279 billion shares), significantly breaking through the milestone of 10 trillion yen. The panic selling in the morning session and the fierce buying back in the afternoon session collided head-on, resulting in heavy trading that literally symbolized a “selling climax (bottoming out after a round of selling).”

2. The mechanism of the market crash and dramatic V-shaped recovery: Why was it sold down to over 3,000 yen temporarily, and why did it rebound by over 2,000 yen from there?

Today’s Tokyo market experienced two extreme market conditions in one day: a “major crash of over 3,000 yen” from the morning session to the beginning of the afternoon session, and a “sharp rebound of over 2,000 yen” from past 13:00, as it bore the brunt of the external political event of the US midterm election vote-counting reports within the Asian market.

① Why did the Nikkei Average temporarily crash by over 3,000 yen (Blue Wave and liquidity trap)

The direct cause of the Nikkei Stock Average’s sharp decline from immediately after the market opened today until just past 1:00 PM was a sudden shift in the U.S. political situation.

As the vote counting for the U.S. midterm elections, which took place the previous day (November 3), progressed from morning to afternoon Japan time, media outlets reported one after another the prospect that the Democratic Party would secure control of both the House and the Senate (a ‘Blue Wave’). Many in the stock market had been anticipating a scenario where the Republican Party would maintain its dominance, leading to continued corporate tax cuts and deregulation; thus, the Democratic sweep was received as a negative surprise that would trigger stricter high-tech regulations and gridlock in fiscal and tax policies.

As was the case during the movement when Donald Trump was first elected (in 2016, which saw a sharp drop followed by a sharp rise), the Tokyo market (Nikkei Average) has the highest market liquidity and the most overwhelming depth in the futures market during Asian hours. Consequently, the Nikkei Average ended up bearing the brunt of the global risk-off selling triggered by the U.S. midterm election results.. Dragged down by the Nikkei’s plunge, the Korea Composite Stock Price Index (KOSPI) also temporarily plummeted by about 3%, and by just past 1:00 PM, the Nikkei’s decline exceeded 3,000 yen, dropping to 60,030 yen.

② The miraculous hold at 60,030 yen and the extreme signal of a ‘minus 8% deviation from the 25-day moving average’

However, the stock price of 60,030 yen recorded just after 1:00 PM became the turning point (the major bottom) of today’s market.

First, what market participants were strongly conscious of was the fact that it did not fall below the 60,000 yen mark. By avoiding a drop below 60,000 yen by a razor-thin margin of just 30 yen, the follow-up selling by the bears stopped abruptly.

Furthermore, what held decisive significance was the reaching of an extreme in technical indicators.

The moment the Nikkei Average was sold down to just shy of 60,000 yen, the downward deviation rate from the 25-day moving average, which measures short-term overheating and overselling, clearly fell below the ‘minus 8% (-8.0%)’ level, which is considered the limit of selling in normal market phases..

In the sharp decline on October 23, a strong autonomous rebound occurred at a 7% negative deviation, but today, by reaching a statistical anomaly (a selling climax) of over 8%—surpassing even that—a ‘strong buy signal’ (oversold signal) was triggered simultaneously in the systems of algorithms and institutional investors.

③ The dramatic clearing of uncertainty brought about by President Trump’s ‘candid concession’

Arriving at the exact same timing as the technical major bottom was major news from Washington.

Following the confirmation that the Democratic Party would control both houses of Congress in the midterm elections, President Trump issued an official statement, delivering a ‘concession’ that acknowledged the Republican Party’s defeat (and the Democratic Party’s victory) in the election results..

This concession brought a tremendous sense of relief to the market.

There had been strong concern in the market beforehand that if the Republican Party lost, President Trump would complain about ‘election fraud’ and repeat excuses for not winning, leading to a situation where the election results would not be finalized and the U.S. political and legislative systems would fall into long-term dysfunction. However, in this instance, Mr. Trump admitted defeat quite candidly. As a result, regardless of the final seat count, the framework that ‘a new Congress led by the Democratic Party will be established’ was finalized, and the greatest uncertainty (the risk of political chaos) that had been hanging over the market was removed in an instant.

As I wrote in my article on November 2, the scenario that ‘no matter which way the election results turn, if they are finalized without delay, the market will clear its uncertainty and reverse’ became a reality in a dramatic fashion due to Mr. Trump’s concession just after 1:00 PM. Not only the Nikkei Average, but also the Korean KOSPI, which had sunk to minus 3%, and the U.S. Nasdaq 100 futures, which had fallen to minus 2.5%, all turned to short covering at the exact same moment.

3. The massive surprise at 2:00 PM: Mitsubishi Corporation’s ‘share buyback of up to 1 trillion yen’ accelerates the market’s recovery to a 2,000 yen range

To the Tokyo market, which had begun to rebound due to the defense of the 60,000 yen level and President Trump’s concession, further massive rocket fuel was added at 2:00 PM (14:00).

Mitsubishi Corporation, the largest general trading company, announced its interim financial results during trading hours, and along with an upward revision of its full-year earnings forecast, it announced a ‘super-massive share buyback with a cap of 1 trillion yen.’

In this announcement, an upward revision of the full-year earnings forecast was made, but the extent of the upward shift itself was relatively moderate. What dealt a major shock to the market was the ‘1 trillion yen scale share buyback,’ which is unprecedented as a single-instance quota.

In the past, only a very small number of Japanese listed companies, such as Toyota Motor Corporation and Honda Motor Co., Ltd., have set a share buyback quota of 1 trillion yen at one time, and this decision can be said to be of a historic scale comparable to those.

This ultra-large-scale buyback by a core company representing Japan has had a powerful ripple effect on the entire market. Confidence in Japanese companies’ shareholder return policies and valuations has risen sharply, and the rebound of the Nikkei Stock Average accelerated further after the 2:00 PM announcement. As a result, it became the decisive driving force that raised the level by approximately 2,000 yen (a divergence rate of about 3 points) from the bottom, serving as a turning point that significantly improved the overall market trend.

The background to the market, which fell by over 3,000 yen, surging by 2,000 yen in just over two hours and finally closing with a loss of 893 yen, was a synergistic effect where the resolution of macro political uncertainty and the historic shareholder returns by micro Japanese companies meshed perfectly. synergy.

4. Sector and Industry Trends: ‘Three Transport Industries’ benefiting from lower crude oil prices, Real Estate, and Trading Companies buck the trend and rise! AI semiconductors also halve their losses.

Looking at the industry-specific stock price indices, reflecting the results of the US midterm elections and the accompanying changes in commodity market conditions (a decline in crude oil prices), the transport sector such as air transport, land transport, and marine transport, the real estate industry, wholesale trade (trading companies), and other products emerged into positive territory. On the other hand, non-ferrous metals and electrical appliances, including AI and semiconductor-related stocks, and the mining and oil sectors, which were hit by the decline in crude oil prices, fell.

[Rising Sector 1: Air, Land, and Marine Transport (Broad-based rise in transport due to favorable lower crude oil prices)]

Today, the transport sector dominated the top of the industry rankings.

Due to the passing of the US midterm elections and changes in speculation surrounding the Middle East situation, international crude oil prices, which had been hovering high above $100, fell. Seeing this as a direct tailwind for lower fuel costs, major airlines Japan Airlines (JAL) and ANA Holdings were bought across the board, and in the land transport sector, passenger railway companies such as JR Central all rose simultaneously. The marine transport sector also secured positive territory, with land, sea, and air transport stocks acting as a breakwater for the market.

[Rising Sector 2: Real Estate & Other Products (Domestic demand flight and easing of geopolitical risks)]

While the entire market was shaken violently by the external political event of the US midterm elections, the real estate industry was bought strongly due to a move to shift funds to domestic demand sectors that are less susceptible to the influence of overseas conditions.

Also, in the other products sector, Nintendo and others rose. The decline in crude oil prices and the slight easing of excessive tension regarding Middle East geopolitical risks led to a sense of security in buying global consumer-related stocks.

[The Truth Behind the Falling Sectors: AI Semiconductor Stocks Show Strong Resilience by ‘Halving Losses from the Bottom’]

On the other hand, non-ferrous metals, electrical appliances, glass and stone products, and machinery AI and semiconductor-related sectors lined up at the top of the negative contribution and industry-specific declines. Due to concerns about big tech regulation following the US Democratic Party’s sweep of both houses, wire stocks, electronic components such as multilayer ceramic capacitors, and semiconductor manufacturing equipment were sold off.

However, the “phenomenal resistance to falling toward the close” is worth noting..

Around 1:00 PM, when the Nikkei Stock Average had plunged by more than 3,000 yen, core stocks such as Advantest and Tokyo Electron were being subjected to intense selling, down 6% to 7% from the previous business day. However, with the overall market rebound from defending the 60,000 yen level, fierce dip-buying entered, and by the close, many AI and semiconductor stocks showed strong downside resistance, “closing with the negative range reduced to about half of the maximum intraday decline.”

Note that the mining (INPEX) and oil/coal product sectors, which had been bought due to high crude oil prices until yesterday, were naturally pushed by profit-taking sales following today’s decline in crude oil prices.

5. Notable Individual Stocks

Today, we will thoroughly explain the trends of the general trading company king that saved the market with a 1 trillion yen share buyback that will remain in securities history, the telecommunications giant whose fortunes were divided by intraday earnings, and the core semiconductor stocks that survived the panic selling.

① Mitsubishi Corporation

In today’s Tokyo market, the protagonist of the great rebound drama from 2:00 PM was Mitsubishi Corporation.

At 2:00 PM during the afternoon trading session, it simultaneously announced an upward revision of its full-year earnings forecast for the fiscal year ending March 2027 and the establishment of a share buyback framework with a limit of 1 trillion yen.

While the full-year earnings forecast remained a solid upward revision, what stunned the market was the “1 trillion yen cap per instance” share buyback, which is on an unprecedented scale. It is an extremely large-scale shareholder return policy that only Japan’s leading manufacturing giants like Toyota Motor and Honda have dared to implement in the past, and immediately after the announcement, index funds and value-stock-oriented capital, as well as domestic and foreign institutional investors, rushed in all at once.

Following this massive surprise, the company’s stock saw a vertical rise and surged immediately after the announcement. It powerfully pulled the entire wholesale sector into positive territory and also ranked high in terms of contribution to pushing up the Nikkei Stock Average, becoming the leading player in the market’s overall sharp recovery of nearly 2,000 yen.

② NTT (Nippon Telegraph and Telephone)

In contrast to Mitsubishi Corporation, it was the telecommunications giant NTT that was sold off as its intraday earnings announcement was received negatively.

Although it upwardly revised its full-year earnings forecast in the earnings report released during trading hours, the stock price fell after the announcement.

The biggest factor behind the dominance of selling was that the revised profit level raised by the company did not reach the pre-announcement average analyst forecast (market consensus). This is the exact same composition as the earnings reactions of Hitachi, NEC, and Komatsu last week, and it resulted in the company receiving the harsh baptism of this earnings season: “Even if it is an upward revision, if it falls short of the market’s high expectations, disappointment selling will occur immediately.”

③ Advantest & Tokyo Electron: From a temporary 6-7% plunge to a fierce buyback in the latter half

Although Advantest and Tokyo Electron were among the top negative contributors to the Nikkei Average, their intraday price movements strongly suggested “the end of selling.”

Following reports of a blue wave in the US midterm elections, both companies were forced into a 6-7% plunge shortly after 1:00 PM. However, real-demand buyers who focused on the solid fundamentals of the super-excellent earnings announced by both companies last week (Advantest’s pre-tax profit of 1 trillion yen and profit margin of over 50%, and Tokyo Electron’s 3 consecutive terms of record profits & 150 billion yen share buyback) were waiting at the lower price levels, and the decline was rapidly reduced to nearly half by the market close.

④ JAL, ANA, JR Central, Nintendo: Domestic demand and blue-chip stocks

Against the backdrop of falling crude oil prices and the calming of geopolitical risks in the Middle East, the two major airlines (JAL, ANA), major transport stocks like JR Central, and Nintendo in the other products sector attracted steady buying throughout the day, providing investors with a sense of security amidst the raging market.

6. Future Outlook: The “blue wave digestion” of tonight’s European and American markets and the “accelerated buyback” scenario after passing the selling climax

Today’s Tokyo market saw the Nikkei Average plunge over 3,000 yen (60,030 yen) before recovering over 2,000 yen, recording a selling climax with a “25-day moving average deviation rate of over minus 8%” accompanied by trading value exceeding 10 trillion yen.

I will provide an outlook on the trends in the European and American markets tonight (the night of the 4th) and the development of Japanese stocks from tomorrow, the 5th (Thursday), onwards.

Tonight’s most important checkpoint: “Reaction of European and American stock markets” to the US midterm election results

During today’s Tokyo session, the Nikkei Average, which has the highest liquidity in Asia, bore the brunt of the initial shock of the “Democratic Party’s sweep of both houses (blue wave)” and plunged 3,000 yen. However, after the uncertainty disappeared following President Trump’s concession, the off-hours trading of “US Nasdaq 100 futures,” which had temporarily fallen to around “-2.5%,” rapidly slowed its decline to around “-0.5%” by the time the Tokyo market closed.

How the actual US and European markets digest these election results tonight will determine the Nikkei Average tomorrow.

If US stocks pass through safely, there is a high probability that “fierce buybacks” will intensify for Japanese stocks

Today’s Nikkei Average plunged to just under 60,000 yen (60,030 yen), and with the 25-day moving average deviation rate clearly falling below minus 8%, it reached a 【considerably deep level (extremely oversold)】 in the short term.

Because such a strong oversold signal has been lit and the panic selling has been digested with over 10 trillion yen in trading, “if only the US market tonight does not panic and moves safely, it would not be strange at all for short covering and dip buying to intensify further in the Tokyo market from tomorrow onwards.”.

Portfolio Strategy After Confirming the Major Bottom (60,030 Yen)

The greatest truth proven by today’s market is that “the 60,000 yen level for the Nikkei Average is an ironclad foundation, and with the 25-day moving average deviation exceeding minus 8% and trading volume surpassing 10 trillion yen, the ‘selling climax (the ultimate capitulation phase)’ that has continued since mid-October is complete.”

Although the Democratic Party’s sweep of both houses in the US midterm elections was initially disliked, the worst-case tail risk of “political vacuum and chaos” has been completely eliminated now that President Trump has gracefully conceded defeat. Furthermore, the shift in crude oil prices to a decline serves as a major positive factor that will calm the “fears of reignited inflation stemming from energy” that have plagued global stock markets until now.

And above all, as demonstrated by the “1 trillion yen share buyback” announced by Mitsubishi Corporation, as well as last week’s announcements from Tokyo Electron (150 billion yen buyback & record profits), Advantest (1 trillion yen pre-tax profit), and Fanuc (50 billion yen buyback & 31% profit increase), the cash-generating power and shareholder return stance of Japanese companies are at their strongest levels in history.

If tonight’s US market passes calmly as suggested by the resilience of Nasdaq futures, it is highly probable that the Tokyo market from tomorrow onwards will carry over the momentum of the 2,000 yen rebound seen toward the close today and enter a full-scale recovery rally.

We are now in a prime position to maximize the benefits of the powerful rebound rally following the passing of the selling climax by firmly holding onto core stocks such as Mitsubishi Corporation, which became the market’s savior with its 1 trillion yen buyback; domestic demand stocks like JAL, ANA, and JR Central that benefit from lower crude oil prices; and strong-earning AI semiconductor stocks like Advantest and Tokyo Electron, which were forcefully bought back after the 3,000 yen panic drop.