FX.co ★ Japanese Shares Rebound as Banks, Retailers Lift

The Nikkei 225 rose 2.33% to close at 58,775 on Monday, recouping part of last week’s steep losses as sentiment improved and gains in financial and consumer-focused shares led the rebound. Major banks advanced sharply, with Mizuho Financial up 5.1%, Mitsubishi UFJ rising 4.4%, and Sumitomo Mitsui gaining 3.9%. Retailers and automakers were also strong performers: Fast Retailing added 3.7%, Nintendo climbed 5.2%, and Toyota Motor advanced 4.6%.

The recovery followed a more than 9% plunge in the Nikkei last week, its sharpest weekly decline since the COVID-19-driven market selloff in March 2020. That downturn was sparked by the Democrats’ sweeping victory in the US midterm elections, which intensified worries about tighter regulation of the AI industry and a possible slowdown in data center investment. Given their substantial exposure to the global AI infrastructure boom, Japanese technology companies remain particularly vulnerable to further weakness in the sector.