Nikkei 225: Here’s Why Japan Stocks Bounced Back Today

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Written By: Crispus Nyaga
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    Summary:
  • In this article, we explore why the Nikkei 225 index is bouncing back today. Japan stocks have risen even after the weak economic data from Japan

The Nikkei 225 index is rising today even after the relative weak economic numbers from Japan. The index is trading at ¥29,000, which is 2.67% above last week’s low of ¥28,293. 

What happened: The Nikkei 225 is rising as part of the global stocks recovery. In Asia, the hang Seng has jumped by 0.90% while in the United States, the Nasdaq 100 and Dow Jones index futures have also rallied. This is partly because the Treasury yield market has relatively cooled-down.

Today, the Nikkei index is rising even after the Japanese statistics agency published the relatively weak economic numbers. The data revealed that the country’s economy expanded by 2.8% in Q4, lower than the median estimate of 3.0%. This growth led to an annualised increase of 11.7%, lower than the expected 12.7%. Meanwhile, data showed that the household spending declined at an annualised rate of 7.3% because of the state of emergency.

Nikkei index top movers: The top movers in the Nikkei 225 index are Sapporo Holdings, Mitsubishi Motors, Sumitomo Dainippon, and Kansai Electric Power. All these firms have risen by more than 6%. On the other hand, companies like Panasonic, Hitachi Zosen, CyberAgent, and, Rakuten are the worst movers in the index.

Nikkei 225 technical forecast

The four-hour chart shows that the Nikkei 225 index has bounced back from last week’s low of ¥28,293. The index has formed a dropping widening channel pattern. It is also slightly below the first support of the Andrews pitchfork tool. It is also at the same level as the 25-day and 15-day moving averages. 

Most importantly, it has formed a small head and shoulders pattern, which hints at more weakness in the near term. If this happens, the next key level to watch is ¥28,293. However, a break above last week’s high of ¥29,450 will invalidate this trend.

Nikkei index chart

Written By: Crispus Nyaga

Crispus Nyaga is an analyst and consultant with more than 8 years of experience. He started trading Forex while completing his BSc degree and he has worked for brokers like OctaFX, easyMarkets, & Capital. He has also contributed widely in leading websites like rkdream.com, SeekingAlpha, iNvezz, DailyForex, and BanklessTimes. In 2017, Crispus completed his MBA.

Published by
Written By: Crispus Nyaga