Japan's Nikkei 225 rose 6.46% in the week ended Friday, Nov. 13, closing at 61,142.35 for what Reuters called its biggest weekly gain in five months, as company earnings and dip-buying pulled Tokyo shares back from the previous week's rout. The broader Topix gained 6.3% to 3,941.57, its strongest week since mid-August 2024, Reuters reported.

For investors across Asia, the week showed two different recoveries inside one market. The broader Topix rose in every session and finished above its level before the Nov. 6 plunge. The Nikkei, which Kyodo News describes as tech-heavy, added 3,707.58 points but has regained only about half of the more than 7,200 points it lost over the five sessions through Nov. 6, based on Kyodo closing figures.

How the Nikkei 225 and Topix moved, day by day

The starting point was grim. On Nov. 6 the Nikkei fell 3,643.13 points, or 5.96%, to 57,434.77, its third-largest point drop on record and its lowest close since mid-April, Kyodo reported. The Topix lost 232.40 points that day to end at 3,707.99. Dealers blamed fears that AI investment and data center construction would face tighter U.S. regulation after the U.S. midterm elections. The Japan Times reported the same closing level and said the index had dropped below 60,000 for the first time since May.

The rebound began on Monday, Nov. 9, when the Nikkei rose 2.33% to 58,775.50 and the Topix jumped 2.97%, with banks, transportation equipment and nonferrous metals leading, according to Kyodo. Advantest, Tokyo Electron and Fast Retailing were among the notable gainers.

The Nikkei moved back above 60,000 on Tuesday, helped by a fall in U.S. crude oil futures below $90 a barrel, and closed at 61,248.59 on Wednesday after a 1.31% gain. Kyodo's Wednesday report put that day's rise at 789.01 points, which implies a Tuesday close of 60,459.58.

Thursday brought the week's only decline for the Nikkei, a 0.70% fall to 60,819.36, after reports about the future of Nvidia's chief executive hit AI and semiconductor shares. The Topix still rose 0.20% that day because most other sectors gained as investors bought companies that had reported strong results, Kyodo said. On Friday the Nikkei recovered 0.53% and the Topix added 0.11%.

Not everyone read the bounce as a turn. Shota Sando, an equity market analyst at Tokai Tokyo Intelligence Laboratory, told Kyodo on Monday that the rebound was “weak” and that the outlook for high-technology shares had become hard to judge.

Earnings carried the broader market

Results for the April-September half did much of the work outside technology. Many listed companies with March year-ends reported higher first-half profits, helped by strong demand linked to the AI boom, The Japan Times reported on Nov. 15.

Banks were a clear example. Sumitomo Mitsui Financial Group raised its net income forecast for the year ending March 31 to ¥1.9 trillion from ¥1.7 trillion, and Mizuho Financial Group lifted its target to ¥1.6 trillion from ¥1.4 trillion, The Japan Times reported. Both announced share buybacks. Bank shares were among the main gainers on the Prime Market on both Monday and Wednesday, according to Kyodo.

Honda Motor raised its full-year operating profit forecast to ¥780 billion on Tuesday and now expects net profit of ¥500 billion, up from ¥400 billion, citing the weaker yen and solid sales in North America, Kyodo reported.

SoftBank Group went the other way. It reported a ¥768.01 billion net loss for the April-September half on Tuesday, its first first-half loss in three years, after changing plans for power facilities at U.S. data centers. Kyodo said the loss initially weighed on the market on Wednesday before buying elsewhere took over.

The yen also mattered for exporters. The dollar briefly topped ¥160 in New York on Thursday for the first time since September, and Finance Minister Satsuki Katayama said on Friday that Japan would take appropriate action if necessary, Kyodo reported. The 10-year Japanese government bond yield ended the week at 2.855%, up from 2.665% on Monday.

Foreign flows: who sold in the rout

Official flow figures for the rebound week are not yet available. The latest Japan Exchange Group data, published on Nov. 12, cover Nov. 2 to 6, the week of the sell-off.

They show overseas investors were net sellers of ¥71.4 billion of shares across the Tokyo and Nagoya exchanges that week, a small figure against the ¥65 trillion or so of foreign buying and selling combined. Domestic individuals were the heavier sellers, at a net ¥480.3 billion across cash and margin accounts.

On the other side, business corporations bought a net ¥310.0 billion, trust banks ¥230.6 billion and investment trusts ¥105.2 billion.

The week ahead for Japanese stocks

The Cabinet Office is scheduled to publish its first preliminary estimate of July-September gross domestic product at 8:50 a.m. Tokyo time on Monday, Nov. 16. A Bank of Japan board member, Takata, is due to speak to business executives in Tokushima the same day at 1 p.m., according to the central bank's calendar.

Japan Customs lists provisional October trade statistics for Nov. 18, and the Statistics Bureau is due to release the October national consumer price index on Nov. 20.

The Japan Exchange Group's next weekly report will show whether foreign investors were buyers as the Nikkei climbed back above 61,000.