Tokyo Stocks: Nikkei 225 and TOPIX Daily — 2026-10-28
The Nikkei 225 rebounded significantly on October 28, closing at 64,053 points, driven by a surge in AI and semiconductor stocks following strong earnings from SK Hynix and Anthropic's IPO filing. Meanwhile, the market braces for a massive structural shift as the Topix index undergoes its largest-ever overhaul, expected to trigger $60 billion in passive trading flows and remove 683 companies.
Tokyo Stocks: Nikkei 225 and TOPIX Daily — 2026-10-28
Top developments
Nikkei 225 Rebounds to 64,053 on AI Chip Rally
On October 28, the Nikkei 225 rose 1.24% (784 points) to close at 64,053 points, marking a second consecutive day of gains. The rally was led by technology and AI-related shares, with significant advances in Kioxia (up 13.8%), SoftBank Group (up 4.7%), and Advantest (up 3.2%). This recovery follows a period of volatility, as investors reacted positively to strong earnings from South Korean chipmaker SK Hynix and reports of an IPO filing by AI giant Anthropic, which revived the global AI trade.
Topix Overhaul Triggers $60 Billion in Passive Flows
The Japan Exchange Group (JPX) announced the implementation of the largest-ever Topix index overhaul, effective Friday, October 30. The reshuffle involves the removal of 683 companies from the index by 2028 due to stricter inclusion rules. This event is expected to generate approximately $60 billion in passive trading activity, particularly concentrated around Thursday’s close (October 29), as index funds rebalance their portfolios. Hedge funds are positioning aggressively for this liquidity event, which represents a significant structural change for Japanese equity markets.
Foreign Investors Turn Net Sellers After Three Weeks of Buying
According to the latest weekly data for the period of October 13–16, foreign investors turned net sellers, dumping ¥365.4 billion in Japanese stocks, marking their first weekly net sell-off in three weeks. In contrast, domestic retail investors (individuals) maintained their buying streak, recording net purchases for the third consecutive week. This divergence highlights a cautious stance from international capital ahead of key central bank decisions and corporate earnings seasons.
Local view
Japanese media outlets such as Nikkei and Fisco reported that the Tokyo market's gains on October 28 were partly tempered by profit-taking in the afternoon session. Nikkei noted that while semiconductor stocks attracted overseas buying, the broader market saw a "pause" as investors awaited the Bank of Japan's upcoming policy decision and key US corporate earnings. Fisco highlighted that the Nikkei briefly rose more than 900 points during the afternoon session before settling lower, reflecting caution ahead of the Topix rebalancing and potential volatility from the yen's movement against the dollar.
Context & numbers
- Nikkei 225 Close (Oct 28): 64,053 points (+1.24%).
- USD/JPY Exchange Rate: Hovering around 157–158 yen per dollar, with the yen remaining a key variable for exporter valuations.
- JGB Yields: The 10-year Japanese government bond yield remained near 2.8%, a level that supports bank stocks but pressures long-duration assets.
- Topix Removals: 683 companies are slated for removal from the Topix index, reducing the total number of constituents and altering passive fund allocations.
- Foreign Net Flow (Oct 13–16): -¥365.4 billion (net sell).
On the radar
- Topix Rebalancing Close: The critical liquidity event for the Topix overhaul is expected to peak during the Thursday, October 29 close, with significant volume spikes anticipated in affected stocks.
- Bank of Japan Decision: Investors are closely watching for any signals regarding interest rate hikes or yield curve control adjustments in the upcoming BoJ meeting, which could impact yen stability and domestic bank stocks.
- US Earnings Season: Results from major US tech companies will continue to influence sentiment in Tokyo’s semiconductor and AI sectors, given the high correlation between the Nasdaq and Nikkei tech weights.
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