Stock Markets January 26, 2026

Tokyo stocks fall as Paper & Pulp, Transport and Communication sectors drag Nikkei down 1.83%

Broad-based declines push Nikkei lower while select names post gains and volatility rises

By Leila Farooq
Tokyo stocks fall as Paper & Pulp, Transport and Communication sectors drag Nikkei down 1.83%

Tokyo markets closed lower with the Nikkei 225 falling 1.83% as sector losses in Paper & Pulp, Transport and Communication weighed on the market. Advancers were outnumbered by decliners across the Tokyo Stock Exchange, while Furukawa Electric reached a five-year high. Commodities and currency moves included gains for crude and Brent oil and a weaker dollar against the yen.

Key Points

  • The Nikkei 225 closed down 1.83% as Paper & Pulp, Transport and Communication sectors led the decline.
  • Top gainers included Mercari (TYO:4385), Nitori (TYO:9843) and Furukawa Electric (TYO:5801); major decliners included Fujitsu (TYO:6702), Renesas (TYO:6723) and SUMCO (TYO:3436).
  • Market breadth was weak with 2,961 stocks down, 686 up and 188 unchanged; Nikkei Volatility rose 6.92% to 31.66.

Tokyo equities ended the trading day in negative territory on Monday, with losses concentrated in the Paper & Pulp, Transport and Communication sectors leading the slide. At the close, the Nikkei 225 was down 1.83%.

Among constituents, Mercari Inc (TYO:4385) was the session's top gainer on the Nikkei 225, climbing 7.24% or 220.00 points to finish at 3,260.00. Nitori Holdings Co Ltd (TYO:9843) added 4.87% or 128.50 points to close at 2,766.00, while Furukawa Electric Co., Ltd. (TYO:5801) rose 3.03% or 370.00 points to end the day at 12,575.00.

On the downside, Fujitsu Ltd. (TYO:6702) recorded the largest decline among Nikkei names, falling 7.83% or 343.00 points to close at 4,037.00. Renesas Electronics Corp (TYO:6723) dropped 6.31% or 158.50 points to finish at 2,355.00, and SUMCO Corp. (TYO:3436) slid 6.09% or 101.50 points to 1,564.50.

Market breadth was weak on the Tokyo Stock Exchange, with 2,961 stocks falling compared with 686 advancing, while 188 issues finished unchanged.

Separately, shares of Furukawa Electric Co., Ltd. (TYO:5801) reached a five-year high during the session, closing up 3.03% to 12,575.00.

Volatility rose as measured by the Nikkei Volatility index - it gained 6.92% to reach 31.66, indicating elevated implied volatility in Nikkei 225 options.

Commodities moved higher in the session. Crude oil for March delivery increased 0.77% or 0.47 to trade at $61.54 a barrel. Brent oil for April delivery rose 0.78% or 0.51 to $65.58 a barrel. The April Gold Futures contract was higher by 1.89% or 94.70, trading at $5,111.70 a troy ounce.

Currency markets showed a softer yen against the dollar and euro benchmarks. USD/JPY declined 0.94% to 154.26, while EUR/JPY fell 0.74% to 182.81. Meanwhile, the US Dollar Index Futures eased 0.40% to 97.01.


Key takeaway - Tokyo closed lower across a broad swath of sectors, with several large-cap names posting steep losses while a handful of stocks posted notable gains. Volatility and commodity price moves accompanied the equity weakness.

Risks

  • Increased implied volatility in Nikkei options - Nikkei Volatility rose 6.92% to 31.66, signaling greater near-term uncertainty for equity derivatives markets (affecting equities and derivatives desks).
  • Broad market declines across multiple sectors - Paper & Pulp, Transport and Communication led losses, suggesting sector-specific pressures that could affect related supply chains and service providers.
  • Currency and commodity swings - movements in USD/JPY, EUR/JPY and oil and gold prices could add volatility to exporters, importers and commodity-linked sectors.

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