Japan’s Nikkei supported by a stable yen; SoftBank’s slide caps win

Japan’s Nikkei stock average rose on Monday, supported by a pause in the yen’s recent strength and a recovery in real estate stocks, but slowed by sharp declines in heavyweight SoftBank Group.While market expectations are rising for a Bank of Japan rate hike next week, traders are reversing some of last week’s big moves that saw the yen rise, real estate stocks fall and bank stocks rally.

The Nikkei added 0.2% to 50,581.94, with 177 of 225 voters rising compared to 48 falling.However, a 3.3% decline for startup investor SoftBank Group shaved 124 points off the Nikkei’s advances.

Uniqlo owner Fast Retailing managed to shave a further 58 points, down 1% due to the huge weighting.

The broader Topix, on the other hand, gained 0.7% to end the day at 3,384.31.

SoftBank is a major investor in OpenAI, and media reports over the weekend said ChatGPT CEO Sam Altman had issued an internal “code red” warning after Google’s Gemini 3 appeared to outperform in several areas. Investors had already become more cautious in recent weeks about the sky-high valuations of many AI-linked stocks, leading to a bout of heavy selling last month.

“There is a sense of overheating in high-tech stocks, making them susceptible to selling pressure,” said Fumika Shimizu, equity strategist at Nomura Securities.

“The underlying trend of declining technology stocks remains intact.”

The Nikkei rose to a record high of 52,636.87 in early November, before the AI-focused sell-off.

“The Nikkei feels heavy,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“For now, I expect the stock to trade sideways. Any upside from here would come with big risks.”

Real estate was among the best performers in the Tokyo Stock Exchange’s 33 industry groups on Monday, rising 3.2%. The banking sector lost 0.6% and was among the worst performing countries.