Past data and expert views offer insight into the possibility that the outcome of the U.S. midterm elections will affect Japanese stocks. The Nikkei's average return in midterm-election years is said to be 1.9%, with the underlying factors and past examples also discussed.
The U.S. midterm elections will be held on 3 November 2026, and are expected to have a potential impact on Japan's stock market as well. Expert Xi Wang (王曦) offers an analysis based on historical data.
Postwar statistics show that the NY Dow's average return was approximately 4.7% in midterm-election years and approximately 5.4% in presidential-election years, with little difference between the two for the Nikkei. By contrast, the Nikkei's average was approximately 1.9% in midterm-election years and approximately 19.7% in presidential-election years, a substantial difference.
The Nikkei, however, has experienced sharp year-to-year fluctuations. In 2018, for example, it fell 12.1% during the midterm elections. As of September 2026, it was up approximately 27.4% from the start of the year, amid considerable volatility.
Factors unrelated to the elections themselves also have a major influence on share prices. The factors cited include the U.S. Federal Reserve's substantial rate hikes and quantitative tightening (QT) in 2022, the U.S.-China trade war and QT in 2018, and the aftereffects of the bursting of the IT bubble in 2002. A stronger yen and domestic factors are also cited as contributing factors.
Overall, the article organizes past data and underlying factors concerning the impact of the midterm elections on Japanese stocks, and presents the view that the elections themselves are not the sole cause.