Japan Market Summary】 Sharp Decline Below 70,000 Yen — Broad Profit-Taking Amid Rising Oil Prices and Interest Rate Concerns, Non-Ferrous Metals and Glass …

Following the previous day’s decline in U.S. stocks, rising oil prices, and higher U.S. long-term interest rates, the Nikkei Stock Average saw a sharp decline. It closed at its low for the day, falling below the 70,000 yen level, with approximately 76% of stocks on the Tokyo Stock Exchange Prime Market declining. Resources, materials, and capital goods—including non-ferrous metals, glass, stone/clay products, and machinery—were particularly heavily sold, and bank stocks were also weak. Gains were limited to sectors such as shipping and services. The market continues to see a correction of short-term overheating.

📊 Major Indices

• Open: 69,840.64 / High: 69,918.20 / Low: 69,042.11 (Closed at low)

• TSE Prime Market Trading Value: Approx. 7.6133 trillion yen (estimated)

• Number of Advancing/Declining Issues: 327 up / 1,182 down / 43 unchanged (approx. 76% down)

Points
Selling pressure dominated from the opening. The market was weighed down by the trend of U.S. long-term interest rates briefly rising to 5.36% (the highest since 2002) and inflation concerns stemming from high oil prices (Brent over $100, WTI near $90). The market failed to recover throughout the day and closed at its low. SoftBank Group contributed to a decline of approximately 218 yen. Profit-taking also continued in semiconductor and AI-related stocks.

Top Contributors (Pushing Up)
Recruit Holdings, KDDI, Trend Micro, Bandai Namco Holdings, Otsuka Holdings, etc.

Bottom Contributors (Pushing Down)
SoftBank Group (approx. -218 yen), Tokyo Electron, TDK, Advantest, Ibiden, Fujikura, Murata Manufacturing, etc.

💻 Performance by Sector (33 TSE Sectors)

Only 7 sectors rose. With 26 sectors declining, the trend of a broad market sell-off intensified.

Top Gainers
① Marine Transportation　+1.25%
② Services　+0.59%
③ Rubber Products　+0.54%
④ Land Transportation　+0.34%
⑤ Pharmaceuticals　+0.20%

Top Losers
① Non-Ferrous Metals　-3.70%
② Glass & Ceramics Products　-3.10%
③ Machinery　-3.02%
④ Banking　(Top Losers)
⑤ Metal Products　-2.49%

(Reference: Electric Appliances -2.08%, Construction -1.75%, Oil & Coal -1.59%)

Overall Trend
Against the backdrop of high oil prices and persistent high interest rates, resources, materials, capital goods, and banking sectors were broadly sold off. Shipping remained relatively firm due to freight market conditions and expectations for improved supply and demand. Services and pharmaceuticals saw defensive demand. Rotation from sectors that had risen until the previous day and profit-taking occurred simultaneously.

🔍 Analysis of Major Declining Sectors: Non-Ferrous Metals (-3.70%) and Glass & Ceramics (-3.10%)

Non-ferrous metals led the decline. Wire and component stocks such as Fujikura and Furukawa Electric plummeted. In glass and ceramics, TOTO and NGK were also sold off.

Background

• Concerns over cost increases due to high oil prices and global interest rate hikes have pushed up discount rates for growth and material stocks.

• Reactionary profit-taking following gains up to the previous day (non-ferrous metals, in particular, were the top gainers on 10/6).

• Machinery and construction equipment (such as Komatsu) also fell in sympathy with the decline of U.S. construction machinery giant Caterpillar.

• Risk-off sentiment due to Middle East tensions (reports related to Iran).

Comparison with Historical Perspectives
The non-ferrous metal and materials sectors are strongly influenced by commodity markets, interest rates, and exchange rates. During the inflationary period of 2021–2022 and the interest rate normalization phase of 2024–2026, the movement of ‘rising real interest rates = stock price discount’ was prominent during sharp interest rate hikes. This decline of over 3% is an adjustment combining short-term overheating relief and a worsening external environment (oil and interest rates), similar to the temporary adjustments in material stocks during the early days of Abenomics in 2013 and the interest rate hike speculation phase in 2023. As long as medium- to long-term AI demand (copper, semiconductor components) does not collapse, there is a possibility of forming a buying opportunity, but as long as oil prices remain in the $100 range, the upside is likely to remain heavy.

📈 Today’s Notable Movers (Major)

Leading the Decline

• SoftBank Group (9984): Sharp decline. The largest downward pressure on the index.

• Tokyo Electron, TDK, Advantest, Ibiden, Fujikura, Murata Manufacturing: Continued profit-taking in AI, semiconductors, and components.

• Komatsu: Sharp decline in sympathy with the fall of U.S. Caterpillar.

• General bank stocks (Mitsubishi UFJ, Mizuho, etc.), construction (some examples like Taisei Corporation hitting year-to-date lows).

Gainers

• Recruit Holdings, KDDI, Trend Micro, Honda, Nintendo, Kioxia Holdings (some instances of bucking the trend), etc. Shipping stocks also remained firm.

📅 Today’s Economic Indicators and Factors

• Foreign investor stock trading trends (weekly): Net buying for the first time in 4 weeks (2.1919 trillion yen)

• High US long-term interest rates and high oil prices are the main factors. TSMC monthly sales and similar data had limited impact.

• Wait-and-see approach ahead of earnings for companies like Fast Retailing.

🏦 Bond Market

• New 10-year JGB yield: 3.080% (down about 0.025% from the previous day, narrowing the decline)

• Long-term government bond futures (December contract): 124.35 yen (rebound)

Domestic long-term interest rates fell slightly. Buying came in as the previous day’s sharp rise in US rates paused and oil prices fell, but the decline narrowed in the afternoon due to a renewed rise in oil prices and US rates. The stalemate in the low 3% range continues. The decline in bank stocks reflects a pause in the re-evaluation of the benefits of rising interest rates.

🛢️ Crude Oil / 🥇 Gold / 💴 Foreign Exchange

The persistence of high crude oil prices is one of the biggest weights on Japanese stocks. Increased import costs and inflation concerns are making investor sentiment cautious.

🇺🇸 Upcoming Schedule

• US economic indicators (unemployment insurance claims, etc.)

• ECB meeting minutes

• Full-scale domestic corporate earnings

• Middle East situation and oil trends

• US interest rates and FOMC-related remarks

Movements in crude oil and US long-term interest rates, in particular, will dictate the short-term direction.

🤞 Looking back at today’s market

A broad sell-off occurred due to the double punch of “high oil prices + interest rate concerns.” Falling below 70,000 yen is psychologically heavy, but it can also be seen as part of resolving short-term overheating. The sharp drops in non-ferrous metals, glass, and machinery are typical adjustments for sectors highly sensitive to commodities and interest rates. The shift of funds into shipping and services is a sign of defensive demand. Weekly net buying by foreign investors remains a supporting factor for the medium to long term.

📌 Today’s Summary

The Nikkei Stock Average fell sharply by 993 yen, closing at its low and dropping below 70,000 yen. With only seven sectors rising, broad profit-taking and risk-off sentiment dominated. The sharp decline in non-ferrous metals, glass, and stone products is a typical pattern historically seen during sudden changes in interest rates and commodities. As long as crude oil remains in the $100 range, inflation concerns are likely to cap the upside for Japanese stocks. On the other hand, there are relatively firm sectors such as shipping and services, so the trend of stock selection continues. From tomorrow onwards, we will closely monitor US economic indicators and the situation in the Middle East.

Source

• Reuters, Kabutan, FISCO, IwaiCosmo Securities market commentary, Trading Economics, various market reports (as of October 8, 2026)

• TSE 33 Industry Sector Performance: Compiled based on data released by FISCO and Kabutan

• Bonds, Currencies, Commodities: Tokyo market closing prices and overseas market estimates

This report is a summary of market conditions based on public information and is not intended as investment advice.