Nikkei 225 Opens Down 1.17% as Yen Becomes the Key Risk Factor
As seen on the 24/7 Wall St. homepage on November 2, 2026.
Tokyo starts the week down 1.17%, and with the Bank of Japan holding rates steady, the yen is now the swing factor for anyone holding Japanese exporters or currency-hedged funds.
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Tokyo's benchmark index slipped to 396.89 at Monday's open, its lowest level of the recent stretch and an extension of a run of weakness.
The Bank of Japan's decision to hold rates steady is the backdrop investors need to understand here. When the central bank stays on hold, it affects how the yen trades relative to other major currencies, and the yen's direction has an outsized effect on Japanese exporters, whose overseas earnings are worth more in yen terms when the currency is weak and less when it strengthens.
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For anyone holding currency-hedged funds tied to Japanese equities, that dynamic cuts differently. Hedged products are designed to strip out currency swings, so their performance reflects the index move itself more directly, meaning today's 1.17% decline lands without the cushion a yen move otherwise provides.
The index had been attempting to stabilize in the 400 to 407 range over the prior several sessions before Monday's gap lower. Whether that range reasserts itself as support, or today's open marks a fresh leg down, will be the defining question as the Tokyo session develops.