Japan’s Nikkei Falls After BOJ Decision

The Nikkei 225 Index declined 0.6% to below 60,200 on Tuesday, retreating from recent record highs after the Bank of Japan left its policy rate unchanged at 0.75% for a fourth consecutive meeting, in line with expectations. The central bank also raised its inflation forecast while lowering growth projections for FY2026 to reflect the economic impact of the Middle East conflict, which is expected to weigh on corporate profits and erode households’ real income. Sentiment was also shaped by ongoing geopolitical developments after Iran submitted a new proposal to the US, which is currently under review by the White House, though disagreements over Tehran’s nuclear program remain a key obstacle. On the corporate front, Advantest fell around 5% despite strong earnings results. Other notable decliners included SoftBank Group (-5.1%), Hitachi (-6.4%), and Fanuc Corp (-3%).

The Nikkei 225 Index gained 854 points or 1.43 percent on Monday to close at 60571 points. Gains were led by Fanuc (15.98%), Keyence Corp (15.83%) and SMC (10.26%).

The Nikkei 225 Index jumped 1.37% to close at 60,537 on Monday, setting new all-time highs as investors largely brushed off diplomatic setbacks between the US and Iran that pushed oil prices higher. Market sentiment remained supported despite elevated geopolitical tensions, while attention also turned to this week’s Bank of Japan policy meeting, where rates are widely expected to stay unchanged as policymakers assess the economic fallout from the Middle East conflict. Technology stocks led the rally, with strong gains in Kioxia Holdings (2.6%), Advantest (7%), Fujikura (5.1%), Disco Corp (6.1%) and Lasertec (1.6%). In corporate news, Fanuc jumped almost 16% after reporting strong earnings driven by robust demand in its factory automation and robotics divisions, particularly across China and the Americas. In contrast, Nomura Holdings dropped over 6% after missing fourth-quarter profit estimates due to writedowns and losses in Europe.