An October survey of more than 1,700 individual investors found that expectations for the Nikkei 225 to rise further over the medium to long term remained intact, while expectations for yen depreciation retreated. Attention is focused on security selection and the direction of monetary policy against a backdrop of a correction in AI-related stocks and rising market uncertainty.
The survey was conducted from 26 to 28 October 2026, with more than 1,700 responses. The Nikkei 225 ended October at ¥63,290, down ¥3,463 from the end of the previous month, while the monthly trading range exceeded ¥9,300, making for volatile trading. Movements in AI- and semiconductor-related stocks affected the market backdrop. The Nikkei 225 was pushed higher at times early in the month on gains in US stocks, but selling prevailed thereafter.
The Nikkei 225 outlook DI was negative 6.51 one month ahead and positive 27.56 three months ahead, indicating a combination of short-term anxiety and medium- to long-term optimism. The number of investors with a bullish view one month ahead increased from the previous survey, while the number with a bearish view rose significantly, suggesting that share prices are likely to be unstable in the short term. Concerns about the financial impact of the AI market attracted attention as a factor in assessing a potential market turning point, while the composition of the three-month DI changed little from the previous survey and medium- to long-term optimism remained intact.
In the foreign exchange DI, the dollar-yen outlook moved in response to economic indicators and US interest-rate trends. The key focuses for November included US employment and inflation indicators and revisions to the outlook for monetary policy in Japan and the US. Dollar-yen rose to the upper ¥158 range during the month, then rebounded to the ¥157 range as risk appetite retreated amid the sell-off in AI stocks. Although leaving rates unchanged was supported at the BOJ policy meeting, markets may move depending on the outlook for monetary policy going forward.
Points of focus going forward include how November’s US employment and inflation indicators, communications from Japanese and US authorities, trends in AI-related stocks, developments in the Middle East and changes in the probability of US rate hikes affect the market. These developments are expected to continue influencing areas of interest in domestic equities, overseas equities and gold markets.