Podcast Transcripts

Japan Markets

Thinking sharp. Executing big. This is Savvy Giant.

Good evening — this is Tokyo Today, Japan Markets, for Friday, October 30, 2026, published at 6:07 PM Japan time.

The Bank of Japan said the thing it has been trying to say for 13 years today. And Tokyo barely looked up.

In its quarterly Outlook Report, the Bank declared that underlying inflation is now at a level generally consistent with its price target — the 2% it has chased since 2013, finally reached. The policy rate stayed at 1.25%, a 31-year high. The vote was 8 to 1: board member Hajime Takata wanted an immediate move to 1.5%, arguing the economy has entered a new phase. He was outvoted, not ignored.

Governor Kazuo Ueda then did something interesting with the milestone. He used it to turn the Bank's caution around. Underlying inflation has reached levels consistent with the target, he said, so the Bank must therefore be vigilant to the risk of inflation overshooting it. That is not the language of a central bank that thinks its work is done. A December move to 1.5% is now most analysts' base case, and by one reading already almost fully priced.

The genuine surprise was not in the rate at all. It was in the portfolio. From January, the Bank will sell down its holdings of equity exchange-traded funds at a pace of about 860 billion yen a year — up from roughly 330 billion. That is two and a half times faster, and it shortens the timeline for unwinding the whole position to around 43 years.

Think about what that actually is. For more than a decade the Bank of Japan was a buyer of Japanese equities, and a famously price-insensitive one. From January it becomes a scheduled, mechanical seller, at nearly triple the rate. It will not move the market on any given day. It changes who is standing on the other side of every day.

And Tokyo sold anyway. The Nikkei closed down about 2.1%, near 63,300, after being down as much as 3% during the session. Tokyo has closed for the day, and that is the worst finish of the week.

But look at the second index, because the second index is the story. The broader TOPIX fell only 0.95%. Roughly a percentage point of difference between the two, and the explanation is that this was not a Japanese selloff. It was a semiconductor selloff wearing Japan's clothes. Decliners beat advancers by about 2,000 to 1,500 — a genuinely negative, risk-off tape — but the weight was concentrated in a narrow band of very expensive chip names. Ibiden down 15%. Lasertec down nearly 9%. Advantest down almost 6%. Tokyo Electron down 5%. SoftBank Group down 6%.

Maki Sawada of Nomura Securities put the cause plainly: this can be seen as a sign of growing concerns regarding the profitability of AI investments, which is weighing on share prices.

Here is where the day gets genuinely awkward, because three Japanese companies reported into that tape and the numbers went the other way.

Tokyo Electron disclosed after the close. Quarterly net profit up almost 27% from a year earlier. Full-year guidance pointing to roughly 1.17 trillion yen of operating income. And a share buyback of about 150 billion yen, starting Sunday and running to the end of March. The company's own explanation for the demand was expanding investment in AI servers and data-centre infrastructure — the exact spending its share price was marked down on today.

Murata Manufacturing raised its full-year profit forecast by 17%, to a record of roughly 396 billion yen, after quarterly profit jumped more than 40% on data-centre component demand. The shares fell as much as 11% anyway, before clawing back a good part of it.

And Ibiden hit its daily limit-down less than a day after reporting quarterly operating profit that more than doubled. The money customers have paid it up front to reserve substrate capacity has gone from about 81 billion yen in March to nearly 200 billion in September. Japanese coverage tied the selling to one thing: Ibiden's exposure to Intel, after Intel's post-earnings slide.

Two numbers, one supply chain. A record annual profit forecast, and a double-digit drawdown on the day it was published. Nothing in these order books changed today. What changed was what the market is willing to pay for them.

Not every Tokyo earnings story went that way. Fujitsu went limit-down, down just over 16%, and it deserved to. First-half adjusted operating profit fell nearly 32%, missing consensus badly, and net profit fell more than 68%. The reason is the uncomfortable kind: unprofitable projects, and roughly 80% of first-half hardware revenue coming from orders booked the previous year at prices that could not absorb the cost increases that followed. The company left its full-year guidance untouched, which is exactly why the stock broke. Holding the full year after a half like that makes the second half look very steep.

On the other side, the domestic earners had a good day. Konami rose 15% on record first-half profits and a lifted dividend. Oriental Land, which runs Tokyo Disney Resort, gained more than 8% on record half-year figures and 13.1 million visitors. ANA climbed over 6%. None of these companies has anything to do with AI capital spending, which today was the entire point.

One more piece of Tokyo plumbing. The TOPIX constituent change the Japan Exchange announced on the 7th of October became effective today. The market-moving session, though, was yesterday: index funds tracking the benchmark had to trade at Thursday's close, so the forced buying in the additions and the forced selling in the deletions has already happened. Today was the administrative date — the new composition simply live from the open.

And the currency. The yen firmed, with dollar-yen down 0.5% to near 157 and a quarter. Its best moment came immediately after the statement, and it gave part of that back once Ueda started talking and declined to put a date on anything.

That leaves Tokyo with a specific problem for next week. Markets are shut Saturday and Sunday — 2 calendar days, costing no trading sessions — and reopen Monday. Then they close again Tuesday for Culture Day. So Monday is a single session wedged between two closures, the kind of calendar that exaggerates whatever flow is already running. Into that goes Tokyo Electron's raised guidance and its buyback, against a chip complex that just repriced on a thesis the company's own order book contradicts. And behind it, a December rate decision the market says it has already paid for.

That's Tokyo Today's Japan Markets. Keep thinking sharp, and executing big.

Global

Tokyo Today — Global.

Amazon spent more than 77 billion dollars on property and equipment in a single quarter, and ended that quarter with cash going out the door at a rate of about 42 billion. That is the number that set the tone across every market that traded today.

The rest of the result was strong. Group revenue rose 12% to roughly 202 billion dollars, operating income rose 61%, and Amazon Web Services grew 39% to about 46 billion, ahead of expectations. Chief executive Andy Jassy said AI spending would be meaningfully higher in 2027 than this year's roughly 220 billion.

So read what the market actually punished. Not demand — demand went up. It was the cash cost of serving it, plus an advertising line that missed and light holiday guidance. A valuation reaction, not a cycle turning.

Intel's problem was different, and it got blurred into the same story. Quarterly revenue rose 21% from a year earlier and landed in line. Then the company guided the current quarter below estimates, citing near-term headwinds across the PC industry — and buried inside it, a factory explosion in Israel that forced a two-week shutdown and cost roughly 600 million dollars of revenue. The shares fell hard in extended trade, down 18% at the time of the Reuters wrap, dragging HP and Dell with them.

A PC story plus an industrial accident is not an AI story. The market made no such distinction today, and that mattered a long way from Oregon.

Oil went the other way, for the hardest kind of reason. The Houthis claimed strikes on Ras Tanura — Saudi Arabia's largest refinery — plus the Rabigh refinery and a production facility at Abqaiq, and the UK's maritime trade operations office reported a tanker in the Strait of Hormuz hit by explosives attached by a small boat.

Brent sat near 113 dollars, up about 1%, heading for a gain of nearly 13% across October — a fourth straight monthly rise. Saul Kavonic of MST Marquee said continued action around the Strait is keeping prices elevated on the expectation of escalation. For an importing economy, that fourth consecutive monthly rise is a direct drag on the trade balance.

Across Asia the chip selling was sharply uneven. South Korea's Kospi fell about 3.5%, the worst in the region, with Samsung Electronics down nearly 6% and SK Hynix more than 8%. Taiwan's main index fell about 2.5%, but TSMC itself fell under 2%. And Hong Kong went up, the Hang Seng gaining almost 1.5% while Shanghai fell 1.4%. Memory took the worst of it, foundry barely moved, Hong Kong rallied — a repricing of one business model, not a regional withdrawal.

Two more, both about who was already positioned. Binance suspended deposits and withdrawals after a breach drained roughly 6.3 billion dollars, probably the largest crypto theft on record, with investigators pointing at North Korea. Bitcoin held near 78,000 dollars, down under 2% — a smaller fall than that headline deserves, which Galaxy Digital's Alex Thorn puts down to the fast money having sold months ago. And in European credit, the 21.7 billion dollar manager Arini is down roughly 26% this year — not a credit event on its own, but a specialist forced defensive in the market it dominated widens spreads for everybody else.

That's Global.

Tech

Tokyo Today — Tech.

Washington has formally decided that imported factory robots are a threat to American national security. On the 28th of October the president signed a proclamation following a Section 232 investigation, after the Commerce Secretary found the United States depends on foreign supply for most categories of robotics and industrial machinery.

What it did not do is impose a tariff. Instead, cabinet officials have 180 days to report back on trade negotiations, with the president saying he may consider alternative remedies — including tariffs — depending on how those go.

No economy is more exposed to that finding than Japan. Fanuc and Yaskawa have each already announced investments to expand robot manufacturing inside the United States, which is precisely the point of a negotiating window rather than a tariff schedule. The threat is the instrument. Localised capacity is the price being asked.

Now the number of the day, and it runs directly against the mood. Sandisk reported quarterly revenue of 11 billion dollars — up 23% from the prior quarter and up 378% from a year earlier — with net income of about 8 billion, and announced an eight-for-one stock split.

A near-quintupling of revenue in a commodity business is a pricing event, not a volume one. NAND flash contract prices have gone vertical on demand for AI inference storage. The direct read-across for Tokyo is Kioxia, whose entire business is NAND and whose realised prices ride the same curve — which makes this the cleanest counterexample available to the week's narrative: the memory cycle is tightening while the market sells the companies levered to it.

Reddit has decided the open web is no longer worth the traffic it buys. The company will require users to log in for full access, with tests starting in selected markets outside the United States this quarter — a direct response to AI scraping and collapsing search referrals. Chief executive Steve Huffman said flatly that Google's AI Mode does not drive traffic.

That is the first large publisher to conclude that being freely readable is a cost rather than a distribution channel. Every content business with a Japanese-language moat — recipe sites, question boards, regional papers — is running that calculation right now.

A harder version of the same technology. CrowdStrike says a China-linked group used AI models, including DeepSeek, together with an open-source framework called ARTEX, to attack more than 200 organisations worldwide in 11 days — compromising at least nine. The same tool was used against South Korean financial institutions in September, and against Japanese companies.

The economics have inverted. Offensive capability that used to need a funded team now needs a commodity model and an open-source harness. The cost of an attempt collapses toward zero while the cost of defending stays fixed, and Japan — which has had a bad month for breaches — is on the wrong side of that.

So two different bets on the same technology landed on Japan today. One says its factory robots are strategically valuable enough to be regulated into relocating. The other says the tools to attack its companies are now cheap enough that anyone can rent them.

That's Tech.

Lifestyle

Tokyo Today — Lifestyle.

The world spent a record 4.45 trillion yen on Japanese anime last year — about 28 billion dollars — up almost 16%. Overseas revenue climbed more than 17%, and foreign buyers are now 57% of the total, the third straight year they have outspent Japan itself.

But the number worth pausing on is the domestic one. Japan's own anime spending grew 14% in a year when real wages were squeezed and convenience-store footfall was falling. Hasegawa Masahiro of the Association of Japanese Animations presented the preliminary figures at TIFFCOM, the market attached to the Tokyo International Film Festival, with final numbers due in December.

Staying with Toho's balance sheet: Godzilla Minus Zero opens here on the 3rd of November, and the first reactions are not hedging. The Hollywood Reporter's David Rooney called Takashi Yamazaki's sequel a radioactive blast and said it tops the spectacle of the first film. Another critic described it as the kind of blockbuster that would never be allowed to exist in the West. It is sitting at 92% on Rotten Tomatoes. And the release date is not a coincidence — the 3rd of November is the day the original Godzilla opened in 1954.

Hideki Matsui pulled on a Yomiuri Giants kit on Friday morning and addressed his squad for the first time as their manager, opening autumn camp in Kawasaki. The club is chasing a first league pennant in 3 years and a first Japan Series title in 15. Matsui left Japan in 2002 as the Giants' cleanup hitter and came back a Yankees World Series MVP, and there is a particular hush in Japanese baseball when a player of that stature walks into the dugout holding a clipboard instead of a bat.

And finally, Mount Fuji turned white this morning. The Japan Meteorological Agency declared the season's first snowcap, with at least a centimetre settled near the summit as of 8 o'clock and the temperature up there at minus 9.4 degrees.

The declaration is routine. How it was made is not. Since 1894, the first snowcap has been called by a person at the Kofu observatory looking north at the mountain and deciding, with their own eyes, that it had turned. This year that job went to automated sensors and weather radar, ending a tradition of visual observation that had run for more than 130 years.

So somewhere in Kofu this morning, for the first time since the Meiji era, the snow arrived on Fuji and nobody had to go to the window.

Enjoy the weekend. That's Lifestyle.

Scraps

Tokyo Today — Scraps.

On the markets side, Japan's National Tax Agency says corporate declared income hit a record 118 trillion yen, with every single industry increasing — a first. JR West is moving into grid-scale batteries on idle railway land, with Chugoku Electric. Evergrande's liquidators sold control of its property-services arm for 513 million dollars. And India's gold imports have collapsed by 81%, which may finally be enough to move global prices.

In the wider world, Benjamin Netanyahu's bloc has fallen well short of a majority while his own party calls the Israeli election stolen — weeks of coalition arithmetic now sit between Israel and a government. More than 43 million early ballots have been cast in the American midterms, 4 days out. China's fifth plenum closed with a record run of party expulsions, making discipline rather than stimulus its theme. And a cap on consecutive working days is being drafted here at 13 days, with employers already asking for exceptions.

And in culture and tech: Chinese electric vehicles are winning converts in South Korea and getting nowhere in Japan, where brand trust rather than price is the binding constraint. Bethesda is reportedly ready to finally name The Elder Scrolls VI, 15 years after Skyrim. Sony is adapting the indie horror game Mouthwashing into a feature film. And Archive of Our Own, fandom's library, could be offline for up to 4 weeks after a security incident.

That's the roundup — and that's Tokyo Today.