The Nikkei 225 fell sharply toward the end of October, closing at approximately ¥62,190 on 26 October. Selling in AI- and semiconductor-related stocks weighed on the index and pushed the RSI to a low level, but a rebound near the 200-day moving average has been suggested.
The Nikkei 225 turned lower after advancing in early October and has entered a deeper correction. It closed at ¥62,189.65 on 26 October, down approximately 12% from the ¥70,683.98 close on 6 October. Selling in AI- and semiconductor-related stocks, concerns about U.S. AI investment and higher crude oil prices have weighed on investor sentiment.
Technically, the 14-day RSI has fallen to 18.0%, indicating oversold conditions, although it is difficult to identify when a rebound will occur. The upward-sloping 200-day moving average is around ¥61,524.30, while the -7.5% line for the 25-day moving average is around ¥61,262.77, making the point at which the decline stops a focus.
As a seasonal factor toward year-end, the average return for November over the past 30 years was +2.42%, the highest of any month, indicating a notable tendency for stock prices to rise in November. However, some recent years have seen declines, and outcomes may vary, so recent market movements cannot be forecast from historical data alone.
The U.S. midterm elections will be held on 3 November local time. Historically, the Nikkei 225 has been relatively firm in some Novembers, but uncertainty is not expected to disappear entirely, and the market's response may vary depending on the election results.
Taking into account emerging factors, earnings trends, monetary policy and currency movements, developments in the November market could lead to a rebound in the Nikkei 225 after the midterm elections.