On February 9, 2026, Japan's Nikkei 225 hit an all-time high of 56,363. 78% of stocks on the Tokyo Stock Exchange surged in a historic rally. But 291 stocks actually went DOWN. KDDI alone dragged the index down by 103 points, and Fujikura, despite posting record earnings, barely moved. Here's the story of the stocks that weren't invited to the party.

What Happened, The LDP's Landslide Ignites "Takaichi Trade"

On February 8, 2026, Japan's ruling Liberal Democratic Party (LDP) won a staggering 316 seats in the House of Representatives election, a postwar record and enough for a two-thirds supermajority. Markets exploded with optimism over Prime Minister Sanae Takaichi's aggressive fiscal spending agenda called the "Strategic 17 Fields," which includes massive defense spending, infrastructure investment, and food tax elimination.

The Nikkei 225 surged over 3,000 points (about 5.5%) intraday, briefly topping 57,000, before closing at 56,363 (+2,110, or +3.89%), a new all-time high. Trading volume on the Tokyo Stock Exchange Prime Market exceeded ¥10 trillion (about $66 billion), a staggering figure.

Of the 1,592 stocks on the Prime Market, 1,249 gained, 291 fell, and 52 were flat. Only 3 of 33 sectors ended in the red: transportation equipment (autos), shipping, and steel.

In other words, nearly everyone was partying, except about 18% of stocks, quietly sighing in the corner.

The Star of the Show (For All the Wrong Reasons): KDDI

The biggest loser of the day was telecommunications giant KDDI (9433). Its stock plummeted as much as 10.25% to ¥2,512 ($16.70), recording its worst intraday drop since March 2020. KDDI's negative contribution to the Nikkei 225 was -103.49 points, the single largest drag among all 225 component stocks. Without KDDI's decline, the Nikkei would have closed above 56,466.

The cause? A massive fraud scandal at G-Plan, a subsidiary of BIGLOBE (which KDDI acquired in 2017). The company disclosed that fraudulent circular transactions in its advertising business had been ongoing since around 2017, resulting in ¥246 billion ($1.6 billion) in overstated revenue and ¥33 billion ($220 million) in actual cash outflows.

CEO Koji Matsuda held a press conference to disclose the full extent of the fraud, and KDDI postponed its Q3 earnings release to the end of March, a highly unusual move. Ironically, the company's "real" business (excluding the fraud) was actually growing, which only amplified the question: "How did nobody catch this?"

Here are the stocks that dragged the Nikkei down the most:

Rank Stock Drag (¥) Reason
1 KDDI -103.49 Subsidiary fraud (¥33B cash outflow)
2 Tokyo Electron -43.12 Profit-taking after strong earnings
3 Fujikura -14.71 Pre-earnings profit-taking
4 Honda -11.43 Auto sector weakness
5 Subaru -9.96 Same as above

Notably, Tokyo Electron, a bellwether semiconductor equipment maker, fell even as the semiconductor sector led the rally. Meanwhile, Advantest surged +11.5%. Same sector, very different outcomes.

Record Earnings, Zero Reward, Fujikura and Sony's Frustrating Day

Fujikura (5803) perfectly illustrated how cruel the market can be.

At 2 PM on February 9, Fujikura announced an upward revision of its full-year net profit forecast to ¥150 billion ($1 billion), a 65% year-over-year increase. This was ¥18 billion above its previous guidance and a whopping ¥11.4 billion above the market consensus. The company also raised its annual dividend by ¥25 to ¥215 per share. Five consecutive years of record profits. A flawless earnings report.

The stock closed at ¥22,390, down ¥5, or -0.02%. On a day when the Nikkei gained +3.89%, finishing flat effectively meant a 4% underperformance. The stock had risen from around ¥200 to ¥22,000 over recent years, so the "good news" was already priced in.

On Yahoo! Finance Japan's bulletin board, one investor had posted before the election: "Let's pray for a Takaichi LDP victory! Go to the polls even if it's snowing!" The LDP won big, the Nikkei exploded higher... but Fujikura just sat there. The irony was not lost on anyone.

Sony Group (6758) had a similar story, closing at ¥3,498 (-¥9, -0.26%) despite reporting strong Q3 results and raising full-year guidance. The stock is still about 23% below its November 2025 peak of ¥4,700, stuck in a "good earnings, bad stock price" limbo that has plagued entertainment stocks.

The Top Losers, Stocks That Hit the Floor While the Nikkei Hit the Ceiling

The full-market losers list was dominated by small-caps, with KDDI being the lone large-cap standout:

Stock Market Price (¥) Drop
Makoto Construction TSE Standard 1,657 -23.18%
Kyowa Consultants TSE Standard 7,720 -22.80%
Pixel Companyz TSE Standard 6 -14.29%
F-Force Group TSE Growth 682 -10.50%
KDDI TSE Prime 2,512 -10.25%
Veritas TSE Growth 540 -10.15%

Yes, you read that right, Pixel Companyz was trading at ¥6 (about 4 cents). It dropped from ¥7 to ¥6, a 14.29% decline. While the Nikkei was celebrating 56,363, this stock existed in a parallel universe of single-digit yen prices. That's the depth of Japan's stock market for you.

Sectors Facing Structural Headwinds from Takaichi's Policies

The "Takaichi Trade" manifested as a classic trio: stocks up, yen down, bonds down. The USD/JPY rate hovered around 157, prompting Japan's Vice Finance Minister Mimura to warn that authorities were "watching with a high sense of urgency."

Several sectors face structural headwinds from the new government's policies:

1. Restaurant & Dining Industry, The Food Tax Trap

Takaichi's flagship policy of eliminating the consumption tax on food for two years sounds great for consumers, but creates a bizarre distortion: takeout food at 0% tax vs. dine-in at 10% tax. Under the current system, the gap is only 2% (8% for takeout vs. 10% for dine-in). This would widen to a full 10 percentage points. If the same beef bowl costs 10% less to take home, expect a massive shift away from restaurant dining.

2. Part-Time Labor-Dependent Businesses

Raising the "income wall" from ¥1.03 million to ¥1.6 million ($10,600 in new threshold) is great for workers, but it increases labor costs for industries heavily dependent on part-time staff, restaurants, retail, and nursing care. The restaurant industry gets hit with a double whammy: food tax distortion AND higher labor costs.

3. Interest Rate-Sensitive Sectors

Aggressive fiscal spending means more government bond issuance, pushing long-term interest rates higher. Japan's 10-year bond yield hit 2.38% in January 2026, a 27-year high. Higher mortgage rates threaten real estate stocks, while railway companies with heavy debt loads face rising borrowing costs.

This Happens Every Time, The "Index Is Up But My Stocks Are Down" Problem

The complaint that "the Nikkei is at an all-time high but my portfolio is red" is not new. It's a structural feature of Japan's market:

  • February 22, 2024 (Nikkei broke post-bubble record at 39,098): 31.3% of Prime Market stocks declined, and a staggering 60.5% of Growth Market stocks fell
  • March 4, 2024 (Nikkei broke 40,000 for the first time): About 70% of Prime Market stocks actually declined
  • 2025 full year: Three stocks alone, SoftBank Group, Advantest, and Tokyo Electron, accounted for 71.26% of the Nikkei's entire annual gain

The root cause is structural. The Nikkei 225 is a price-weighted index, meaning stocks with higher share prices have outsized influence regardless of company size. The NT ratio (Nikkei ÷ TOPIX) has risen steadily from 9.42 to 15.55 over 20 years, showing a growing disconnect between the headline index and market reality.

February 9's decline rate of 18% was actually healthier than 2024's record-breaking sessions (31% and 70% declining). The Takaichi Trade spread benefits across defense, shipbuilding, construction, real estate, and non-ferrous metals, a broader base than the semiconductor-dominated rallies of the past.

Meanwhile, in the Growth Market...

The Growth 250 index gained just +0.32% on this day, roughly one-twelfth of the Nikkei's +3.89%. Individual investors concentrated in growth stocks probably watched their timelines fill up with "Nikkei all-time high! Huge gains!" posts while staring at their own flat or red portfolios.

Takahide Kiuchi of the Nomura Research Institute threw cold water on the euphoria, arguing that "the Takaichi Trade is approaching its limits" and that "whether fiscal policy stays aggressive or is moderated, both scenarios carry stock decline risks." The morning-after headache may be coming, or the party could rage on toward 60,000. The market hasn't decided yet.

Looking at the Nikkei number and concluding "Japanese stocks are doing great!" is about as misleading as looking at average income statistics and thinking "everyone's wealthy." What matters is whether your portfolio was invited to today's celebration.

Does your country's stock market have a similar phenomenon, where the main index soars but most individual stocks don't follow? We'd love to hear your experience!

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