Nikkei Slips on Final Session, Still Posts 26% Gain in 2025

Japan’s stock market closed the final trading session of 2025 slightly lower, as profit-taking in technology stocks weighed on the benchmark after a blockbuster year of gains.

The Nikkei 225 slipped 0.4% to end at 50,339.48 on Tuesday, while the broader Topix fell 0.5%. Despite the late pullback, the Nikkei delivered a strong 26% gain for the year—marking its third straight annual advance and its best performance since 2023. The Topix was not far behind, rising 22% in 2025.

Japanese equities enjoyed a powerful rally throughout the year, supported by corporate governance reforms championed by the Tokyo Stock Exchange and a surge of enthusiasm surrounding artificial intelligence investments.

Momentum accelerated in early November, when the Nikkei hit an intraday record high of 52,636.87 following the election of Prime Minister Sanae Takaichi, whose campaign centered on aggressive fiscal stimulus.

Speaking at the Tokyo Stock Exchange after the close, Takaichi noted that the first half of the year had been challenged by global economic headwinds such as inflation, labor shortages, and US tariffs. However, she highlighted that strong corporate resilience combined with policy support drove a sharp turnaround in the second half, pushing the Nikkei past the 50,000 milestone for the first time in history.

The softer close also followed weakness in US markets overnight, where major indices retreated as technology stocks pulled back after last week’s record-setting rally.

According to analysts, the decline was largely driven by the drop in US equities and losses in heavyweight SoftBank Group, rather than fading optimism around AI. They attributed the move to year-end portfolio adjustments amid thin trading conditions, adding that the pullback was not a cause for concern given the magnitude of gains seen this year.

SoftBank fell 1.9%, becoming the biggest drag on the Nikkei, after announcing a US$4 billion acquisition of digital infrastructure investor DigitalBridge Group. Despite the dip, SoftBank shares surged an impressive 93% over the course of 2025.

Market breadth was negative, with 162 decliners versus 61 advancers on the Nikkei. Fujitsu led the gainers with a 2.3% rise, followed by Screen Holdings, up 1.6%. On the downside, Sumitomo Metal Mining dropped 4.8%, while online retailer Rakuten Group slid 2.7%.

Take a view on the Japan market via the Nikkei 225 Futures now. Open an account now!

Or Trade Japanese stocks & ETFs at 0.08% (with no minimum fee) now!