Nikkei 225 Ends Higher
Nikkei 225 index trade lower on Thursday mirroring heavy losses in Wall Street. The correction from extreme valuations in Nasdaq and technology shares continue. Traders are concerned about the rising number of new coronavirus infections in the northern hemisphere and especially in Europe, where many countries are preparing for a second lockdown. Federal Reserve members warned that the U.S. economy is in a deep hole and the unemployment will stay at high levels calling for more monetary and fiscal stimulus.
Bank of Japan (BOJ) kept the interest rates unchanged at -0.1% in the first policy meeting under the Yoshihide Suga administration. BOJ also kept the monetary stimulus intact. In the policy meeting minutes released today, several committee members warned that the health crisis could lead to solvency problems for some companies and might affect financial stability as the financial system vulnerability increase. The central bank also noted that the resurgence in coronavirus infections might delay the economic recovery.
In the forex calendar today, investors await the initial jobless claims in the USA with expectations for a slight drop.
Nikkei 225 ended 1.11% lower at 23,087 the lowest level since September 9 and now approaches the critical 50-day moving average support. The three major indices in the USA – Nasdaq, Dow Jones and S&P 500 – are trading below the 50-day moving average.
Initial resistance for the Nikkei 225 index is at 23,039 the daily low. Bearish traders wait for a break below the 50-day moving average at 22,939 to open new short positions, targeting the next support at 22,612 the low from August 28.
On the other side, resistance for the index stands at 23,234 the daily top. Next hurdle for Nikkei 225 is at 23,381 the high from yesterday. A break above might test 23,584 the high from September 14.
