Nikkei 225 Ends Higher
Nikkei 225 retreat today from the six-month highs that reached the previous week after economic data showed that the Japanese economy contracted the most since 1980. Japan Gross Domestic Product (GDP) registered in at -7.8%, worse than analyst’s expectations of -7.6% in the second quarter. The Japanese economy shrank by 27.8% from the previous year, which is worse than the contraction during the Great Financial crisis. The expectations were for an annualized contraction of 27.2%.
Japan Industrial Production dropped to 1.9% in June from 2.7% in May. The annualized reading for Japan Industrial Production came in at -18.2% in June from -17.7% in May. Japan Capacity Utilization improved to 6.2% in June from previous -11.6%.
The cancellation of the meeting between China and the USA to discuss the progress of phase one deal between the two superpowers also weighs on investors sentiment.
Among the worst performers in Nikkei 225 are Citizen Watch, Nippon, Olympus, and Dentsu Group. Top winners are Suzuki Motor, Hitachi, Nissan Motor and Subaru Corp.
Nikkei 225 finished 0.83% lower at 23,096, as the bulls’ stop for breath at recent highs. The technical picture is positive while the weak fundamentals actor that drove the index lower today.
Only a break below the 50-day simple moving average at 22,561, can cancel the bullish momentum. That looks distant for now as the index first has to break 22,710 the low from August 12.
On the upside, immediate resistance provides the daily top at 23,248. The next hurdle for Nikkei 225 is at 23,330 the high from Friday’s trading session. For the next supply zone, we have to go back to February 20 top at 23,828.
