Japanese Stocks Rebound Sharply as Fresh Optimism Surrounds Artificial Intelligence

2026-10-28 global

Tokyo, Wednesday, 28 October 2026.
Tokyo’s market surged over 1,000 points on October 27, fueled by semiconductor gains after US-based Anthropic filed for a massive public listing valued up to two trillion dollars.

Tokyo’s Rebound: Nikkei Surges Past 63,000 on AI-Driven Optimism

Japan’s benchmark Nikkei Stock Average surged by a remarkable 1,042.72 points, or 1.68%, to close at 63,232.37 on October 27, 2026, marking a decisive rebound after three consecutive days of declines [1][2][3][4][5]. The rally, the strongest single-day gain since early July 2026, was primarily fueled by renewed investor enthusiasm for artificial intelligence (AI) and semiconductor-related equities, as well as spillover strength from robust U.S. market performance on October 26, 2026 [1][2][3][5]. The momentum extended into broader Asian markets, with South Korea’s Kospi index gaining 3.1% on the same day, led by technology giants Samsung Electronics and SK Hynix [1].

Anthropic’s IPO Filing Sparks Semiconductor Rally

The catalyst for Tokyo’s rebound was the October 26, 2026 filing of an S-1 registration statement by U.S.-based AI developer Anthropic, signaling imminent plans for a public listing on the Nasdaq with a potential valuation of up to 2 trillion dollars [5][10]. The filing, which followed a first-half 2026 revenue surge of 14 times year-over-year to 16.286 billion dollars—despite an 80.7 billion dollar net loss—sparked a global AI and semiconductor equity rally [10]. In Tokyo, shares of semiconductor equipment manufacturers Tokyo Electron and Screen Holdings jumped 4.5% and 5.2%, respectively, while Tokyo’s Nikkei index briefly approached 64,000 points before settling at 63,268.37 [1][2][5]. The filing’s timing aligned with pre-market expectations that the U.S. Federal Reserve would maintain its policy rate at 3.75%–4.00% during its October 27–28, 2026 meeting, reducing near-term volatility concerns [10].

U.S. Tech Strength and Macro Concerns

The Tokyo rally mirrored gains in U.S. equity markets on October 26, 2026, where the Dow Jones Industrial Average rose 146.42 points (0.28%) to 52,361.58, the Nasdaq Composite gained 214.04 points (0.82%) to 26,169.38, and the PHLX Semiconductor Index (SOX) surged 304 points (2.82%) to 11,083.47 [5][10]. The Nasdaq’s 0.8% gain was attributed to renewed AI optimism, particularly following news of Anthropic’s IPO filing and Nvidia’s strong earnings outlook [10]. However, macroeconomic headwinds persisted: Brent crude oil prices remained elevated around $110 per barrel, and ocean freight charges surged 97.7% year-over-year, reflecting ongoing supply chain disruptions [1]. Meanwhile, the Japanese yen weakened to 157.5–157.7 per U.S. dollar, down from 156.98 the previous session, as the Bank of Japan’s policy meeting loomed large [1].

Inflation and Policy Outlook Ahead of BOJ Decision

On the inflation front, Japan’s business services price index rose 3.7% year-over-year in September 2026, reaching 115.5 (with 2020 as the base year), while underlying consumer inflation accelerated to 3.2% from 2.6% in August 2026 [1]. These figures underscored persistent inflationary pressures as the Bank of Japan (BOJ) prepared for its two-day monetary policy meeting concluding on October 30, 2026 [1][6]. Market consensus widely expects the BOJ to maintain its policy rate at 1.25%, balancing inflation concerns with cautious optimism about economic growth [1][6]. Finance Minister Satsuki Katayama emphasized the government’s vigilance regarding foreign exchange developments, stating that currency movements should reflect underlying economic fundamentals [1].

Sectoral Dynamics: AI and Semiconductors Lead, Real Estate Lags

The October 27, 2026 rebound was broad-based but uneven across sectors. AI and semiconductor-related stocks led the charge, with major players such as Advantest, Tokyo Electron, and Fanuc recording double-digit gains [2][3][5]. Advantest’s shares surged over 10%, temporarily boosting the Nikkei by approximately 600 points, as investors anticipated sustained demand from AI infrastructure investments [3]. In contrast, real estate stocks declined amid concerns over government intervention to curb housing price inflation, particularly following reports that Chiyoda Ward in Tokyo had requested Mitsubishi Estate Residence enforce a five-year resale ban on a planned condominium project [4]. Defensive sectors, including pharmaceuticals and utilities, also underperformed as investors rotated into higher-beta technology names [2][3].

Technical Outlook and Short-Term Projections

Technically, the Nikkei’s rebound above the 63,000 threshold was interpreted by analysts as a signal that the market may have exited its recent correction phase. The index’s (63,232.37 – 62,189.65) / 62,189.65 * 100 = 1.68% gain on October 27, 2026, followed a 0.76% decline on October 26, 2026, when the index had fallen to 62,189.65—the lowest level since July 30, 2026 [1][2][3]. Market breadth improved significantly, with advances outpacing declines by a wide margin, particularly in the electric machinery and non-ferrous metals sectors [2][3]. However, analysts cautioned that the sustainability of the rally would depend on whether the U.S. Federal Reserve’s policy stance and upcoming earnings reports from major companies, including Shin-Etsu Chemical and Chugai Pharmaceutical, align with current optimistic expectations [4].

Sources

Artificial intelligence Nikkei