The Session: Chip Testers and Banks Do the Lifting
The Nikkei 225 closed Thursday at 64,659.47, up 1.10%, extending its winning streak on the back of an upbeat forecast revision from Advantest and a firm bid for bank shares one day before the Bank of Japan’s policy decision. The broader market was far less emphatic: the TOPIX proxy (1306 ETF) added just 0.31% to 421.30, a gap that tells you most of the index-level gain came from a handful of heavyweight names rather than a broad advance.
Advantest (6857) jumped 6.01% to 37,030 after raising its full-year operating profit forecast on AI chip-testing demand, making it the session’s largest single-stock contributor to the Nikkei. Tokyo Electron (8035) rose 2.35% in sympathy. The yen was a non-event, closing at 157.87 against the dollar (-0.08%) — a stable, weak-yen backdrop exporters will take. Overnight support came from Wall Street, where the S&P 500 gained 0.28% to 7,743.98 and the Philadelphia Semiconductor Index jumped 1.75%.
Single Stocks: A Brutal Earnings Tape Beneath the Surface
The movers list (from our fixed 95-name large-cap universe, not a full-market scan) shows how two-sided this earnings season has become:
| Stock | Move | Volume vs 20d avg |
|---|---|---|
| Advantest (6857) | +6.01% | 1.6x |
| Denso (6902) | +3.29% | 5.6x |
| Mizuho (8411) | +3.27% | 1.5x |
| Hitachi (6501) | -9.77% | 4.1x |
| Komatsu (6301) | -7.56% | 3.4x |
| NEC (6701) | -6.39% | 3.1x |
Hitachi’s near-10% slide on four times normal volume is the standout. Our read — and it is analysis, not a verified fact — is that this looks like profit-taking into strength after a long run rather than a fundamental miss, but either way the severity of the reaction shows how little forgiveness is priced into crowded industrial-digital names. Komatsu and NEC also fell hard on elevated volume. On the financial side, Mizuho (+3.27%), Nomura (+3.00%) and MUFG (+2.58% to 3,464) all rallied with JGB yields grinding higher: the MOF’s official curve (as of Oct 28) had the 10-year at 2.867% (+3.8bp on the day) and the 40-year up 6.2bp to 3.974%.
Sectors: Banks Lead, Machinery Bleeds
Using TOPIX-17 ETF proxies (Nomura NEXT FUNDS closes, which can deviate slightly from official sector indices), 12 of 17 sectors advanced. Banks led at +2.12% (+1.81pp versus TOPIX), followed by Power & Gas at +1.97%. The laggards were Machinery at -2.44% — Komatsu’s drop doing much of the damage — and, perhaps counterintuitively on an Advantest day, Electric & Precision at -2.22%. The tech complex was sharply bifurcated: chip-testing and semiconductor-equipment names rallied while Keyence (-3.57%), Renesas (-4.63%) and NEC sold off, dragging the broader electronics complex lower.
Positioning: Short-Selling Ratio at the Top of Its Range
Our daily signature stat: short sales accounted for 45.6% of total TSE trading value on Thursday (40.9% under the price rule plus 4.7% unrestricted), on heavy total turnover of ¥15.15 trillion. That is the top of the last eight sessions’ range (39.4%–45.6%, average 41.3%) — an elevated, defensive reading. With the BOJ decision landing Friday, a large share of Thursday’s volume was being hedged or faded rather than chased, even as the index extended its winning streak.
The rest of the positioning picture leans the other way, against the shorts. JSF data for the previous session (Oct 28 — Thursday’s figures are not yet published) showed loans for margin buying at ¥0.60 trillion versus ¥0.21 trillion of stock lending on the short side. Leveraged long demand was building in Toyota (margin-loan balance +122,300 shares on the day) and Advantest (+29,200), while SoftBank Group longs trimmed (-78,500). Meanwhile 434 of 1,065 loanable issues incurred gyaku-hibu premium charges — the extra daily cost short sellers pay when borrow is tight — a fairly broad squeeze-cost signal. Separately, JPX published 991 large disclosed-short-position reports across 662 issues, topped by TOWA (16.3% of shares outstanding) and KLab (14.1%); these are lagged regulatory position filings, useful for mapping where shorts are concentrated, not a read on today’s selling. The Nikkei Volatility Index, for its part, fell sharply to 25.80 (-7.08), the 64th percentile of the past 934 sessions — normal territory.
Weekly Flows
MOF cross-border securities data for the week of October 18–24 (designated major reporters; weekly figures, not today’s flows) showed foreign investors net bought ¥1.18 trillion of Japanese equities, while Japanese residents net bought ¥0.29 trillion of foreign equities. Foreign demand remains the tailwind behind this leg of the rally.
What to Watch
- BOJ decision and Outlook Report, Friday Oct 30. The market has priced a hold around 1.25%; the real event is the communication — any hawkish tilt pointing to a December hike would matter for the banks that led Thursday and for a yen parked near 157.87.
- Whether the short-sell ratio recedes from 45.6%. If it stays pinned at the top of the range after the BOJ passes, defensiveness is more than event hedging.
- The US setup. S&P 500 futures slipped 0.34% overnight — a softer handoff into Friday’s open.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.