What causes the Nikkei 225 to rise or fall?

The Nikkei 225 rises or falls based on a combination of domestic and global factors. Corporate earnings reports from its constituent companies like Toyota, Sony, and SoftBank have direct impact, as do Bank of Japan monetary policy decisions, particularly interest rate changes and quantitative easing measures. The yen's exchange rate is especially influential since a weaker yen boosts export-heavy Japanese companies, lifting the index, while a stronger yen tends to drag it down. Global factors also play a major role. Wall Street performance, particularly the S&P 500 and Dow Jones, heavily influences overnight sentiment. Geopolitical events, commodity prices, Chinese economic data, and broader risk appetite among international investors all contribute to daily movements in the Nikkei 225.