Nikkei 225 Slips at the Open as Yen Strength Hits Exporters
As seen on the 24/7 Wall St. homepage on October 20, 2026.
Tokyo opens 0.66% below its last close, and with the Bank of Japan edging toward declaring underlying inflation at 2%, a firmer yen squeezes the exporters that carry this index. Anyone holding Japan exposure feels this before the US session starts.
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The Nikkei 225 opened Tuesday's session down 0.66%, extending a slide that has pulled the index back from highs reached earlier in the month.
The Bank of Japan has been edging toward formally declaring that underlying inflation has reached its 2% target, a threshold that signals further policy normalization and keeps the yen firm. A stronger yen directly compresses the overseas earnings of the export-heavy companies that carry the most weight in this index.
Japan's exporters, from automakers to electronics manufacturers, report earnings in yen but earn heavily in dollars and euros. When the yen firms, those foreign revenues translate into fewer yen at home, and the market prices that in quickly at the open before US traders are even at their desks.
Anyone with Japan exposure in a global portfolio sees this move before the New York session begins, which means there is no waiting for a more convenient moment to assess it. The direction of Bank of Japan policy commentary in the sessions ahead is the single clearest variable to track from here.