Nikkei 225 Attempts Recovery Despite Chip Selloff and Kioxia Outlook

Key Takeaways

• The cash Nikkei 225 fell 0.7% at 9:08 a.m. Tokyo time on 2 November, while the broader Topix fell about 0.8%.
• The Philadelphia Semiconductor Index plunged 7.2% on 30 October, and Intel suffered its largest fall in more than four decades.
• Kioxia forecast quarterly operating profit of ¥2 trillion (about $12.7 billion), below expectations, raising concerns that memory prices could stall.
• Japan’s cash market is closed on 3 November for Culture Day, and US midterm results will emerge during Asian hours on 4 November.
• Traders are watching 63,440–63,500 for a potential recovery breakout and 63,000 for further downside risk.

Japanese stocks opened lower as weakness in US technology shares carried into Asian trading. Chip-related names such as Ibiden and Sumco came under pressure.

The latest session shows the Nikkei 225 recovering to 63,421.15, up 1,051.33 points or 1.69% from the opening price. The rebound suggests buying interest has returned, although semiconductor earnings concerns and uncertainty over AI investment returns continue to weigh on sentiment.

Why Traders Are Watching the Nikkei 225

The immediate focus is whether AI-linked demand can keep supporting earnings as spending rises. Kioxia’s outlook brings memory pricing into question, and slower price growth could limit earnings momentum even if demand stays strong.

The calendar adds further caution. With Japan’s cash market shut on 3 November and US election results arriving on 4 November, traders face a possible repricing of expectations for trade, taxation and government spending when Japanese trading resumes.

Key factors influencing the Nikkei 225’s outlook include:

• Chip Earnings: Whether upcoming results stabilise profit expectations across Japan’s technology sector.
• Memory Pricing: Whether the recent surge in memory prices continues or stalls.
• US Midterm Elections: Whether results move US yields, currencies and risk appetite.
• Breadth of Recovery: Whether gains spread across the market rather than a few companies.

Key Trading Levels

The Nikkei 225 has recovered above its short moving average but remains below the earlier 64,000–65,000 trading area. Holding 63,000 would suggest selling pressure is easing, although a recovery remains unconfirmed.

A sustained break above 63,440–63,500, followed by a successful retest, could open a move towards 64,000. Continued buying could then bring 64,200 into focus, with 64,500 and 65,000 beyond that if higher lows develop.

However, a break below 63,000, following a failure at 63,440–63,500, could expose 62,600 and then 62,500. A sustained break below 62,500 that fails to reclaim the area would suggest further weakness towards 62,000 and 61,800–61,900.

Bottom Line

The Nikkei 225’s direction depends on whether earnings can stabilise profit expectations in Japan’s technology sector. Stronger guidance, resilient memory demand and evidence that AI investment is paying off could attract buyers, especially if the recovery broadens. Further earnings misses, weaker pricing expectations or election-driven volatility could prolong selling pressure.

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