Japan’s Nikkei Stock Average Ends Lower on Profit-Booking; Komeito Exit Stirs Political Woes (UPDATE 1)

Reuters

12:57 JST, October 10, 2025 (updated at 16:44 JST)

TOKYO, Oct 10 (Reuters) – Japan’s Nikkei fell on Friday on profit-booking ahead of a long weekend, with reports after the close that the Komeito party would leave the ruling coalition, renewing political uncertainty.

The Nikkei .N225 fell 1.01% to 48,088.8, but still notched its best week in more than a year, rising 5%, helped by a sharp jump in Uniqlo brand owner Fast Retailing 9983.T.

The broader Topix .TOPX slipped 1.85% to 3,197,59.

After the market closed, Japan’s local media reported that the Komeito party will leave the ruling coalition with the LDP, casting uncertainty over the LDP’s ability to govern as Sanae Takaichi takes over the party.

The Nikkei jumped this week, after Takaichi won the party’s leadership election and placed on course to become the next prime minister, boosting expectations of renewed fiscal stimulus and loose monetary policy.

“It was natural that investors wanted to book profits after the sharp rally,” Tokai Tokyo Intelligence Laboratory market analyst Shuutarou Yasuda said.

“But worries that whether Takaichi can successfully secure coalition partners are growing. The stocks rose on expectations of Takaichi’s fiscal spending, but if the Liberal Democratic Party (LDP) can not form a solid coalition, Takaichi’s plans may not go ahead.”

Technology investor SoftBank Group 9984.T lost 3.14%. Chip-related shares fell, with Advantest 6857.T and Tokyo Electron 8035.T slipping 0.94% and 1.41%, respectively.

The Nikkei rose by around 6,000 points from the low hit on September 3 till Thursday. Of this, 70% of the gains came from the rally in these three firms, said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

Fast Retailing jumped 6.65% to become the biggest support for the Nikkei, after it posted a record high annual profit.

All but one of the Tokyo Stock Exchange’s 33 industry sub-indexes fell, with the brokerage index .ISECU.T losing 5% to become the worst performer.