Nikkei Deflates After Record: A Break or a Sign of Fatigue?
The Nikkei 225 closed down around 0.2% on Tuesday, October 28, 2025, after breaking a historic record the previous day, closing above 50,000 for the first time at 50,512.32. Investors appeared to be taking profits after a sharp rally fueled by the euphoria surrounding fiscal stimulus under new Prime Minister Sanae Takaichi, who arrived with promises of large spending, defense support, and signals of close ties with Washington.
Selling pressure also emerged as the market awaited Takaichi's face-to-face meeting with US President Donald Trump in Tokyo before Trump meets with Xi Jinping, which is considered crucial for Japan's economic, security, and investment cooperation in the US.
Despite the slight correction, sentiment has not completely declined. Asian investors remain hopeful of a US-China trade deal when Trump and Xi meet this week in South Korea, which could reduce the risk of a global tariff war.
At the same time, the Japanese market is also keeping an eye on the Fed: market participants expect the US central bank to cut interest rates by another 0.25 percentage points this week, which could maintain global liquidity and support riskier assets, including export- and technology-sensitive Japanese stocks.
This means that today's Nikkei decline looks more like a "catch-up after a sprint," rather than a signal of a risk-on surge. (az)
Source: Newsmaker.id
