Japanese markets rebound after sharp weekly decline

The Nikkei 225 advanced 2.33% to close at 58,775 on Monday, recovering some of last week?s losses as market sentiment improved. The rebound was led by financial and consumer-oriented stocks. Banking shares recorded strong gains, with Mizuho Financial rising 5.1%, Mitsubishi UFJ gaining 4.4% and Sumitomo Mitsui advancing 3.9%. Retail and automobile stocks also performed well, with Fast Retailing up 3.7%, Nintendo rising 5.2% and Toyota Motor gaining 4.6%.

The recovery followed a sharp decline of more than 9% last week, marking the Nikkei?s steepest weekly fall since the COVID-19-induced market selloff in March 2020. The decline was triggered by the Democrats? sweeping victory in the US midterm elections, which raised concerns over tighter regulations on the AI industry and a possible slowdown in data centre expansion. Given their significant exposure to the global AI infrastructure boom, Japanese technology companies remain vulnerable to further weakness in the sector.

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