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Nikkei 225 Ends Higher As U.S. Futures Point to Strong Opening

Nikkei
Nikkei

Nikkei 225 started the week on positive foot mirroring a strong finish in Wall Street on Friday. News that the Democratic lawmakers working on a 2.2 trillion relief package for the U.S. economy boosted sentiment. Investors focus would be tomorrow on the first debate between Biden and Trump ahead of the U.S. elections in November.

Leading Economic Index Inline with Expectations

From Japan, the Leading Economic Index in July came in at 86.9 as expected, while the Japan Coincident Index registered in at 76.2 in line with expectations. The Japanese government said that would not hesitate to use additional economic relief package as the recovery has stalled the last two months. Bank of Japan the previous week kept the interest rates and the Q.E. unchanged and warned that the coronavirus crisis could lead to corporate solvency problems.  

A new round of sanctions from the USA to Chinese chipmakers increases investors fears that a new escalation in trade relationships between China and USA will cancel the economic recovery. 

Among the top performers in Nikkei are Chiba Bank, Konica Minolta and Mitsubishi Motors, on the other hand, ANA Holdings Mitsui Lines and Nippon Yusen ended lower on Monday. 

Nikkei 225 Analysis

Nikkei 225 is the only index that is registering gains in September. Most of the major indices around the globe experiencing losses during September with Nasdaq 10% lower for the month. 

Nikkei 225 keeps the positive momentum intact and points to higher levels. First resistance for the index is at 23,516 the daily high. Next hurdle for Nikkei would be met at 23,783 the top from February 20. A break above might challenge 24,008 the high from February 6. 

On the other side, support for Nikkei 225 stands at 23,303 the daily low. The low from Friday’s trading session at 23,162 is the next support. A trend changer would be a break below the 50-day moving average at 22,972. 

Nikkei 225 Daily Chart