After the huge rally of recent weeks, contracts on the Nikkei (JAP225) have re-entered a correction and are losing almost 1.5% today. The mood in Asian markets remains quite mixed, with Chinese index contracts also losing.
- Last week the Nikkei reached 33-year highs and gained 10 days in a row so the correction should not be surprising. Takai Tokyo Research believes that the reason for today's correction is the lack of bullish activity by institutional investors from the US, where the stock market is closed today due to a holiday. However Takai analysts expect, that increases may return as Wall Street trading resumes;
- The index is supported by the long-weakening Japanese yen, with the USDJPY approaching a 7-month low as the Bank of Japan maintains its previous dovish policy. However, Tachibana Securities points to a possible hawkish move by the BoJ in the near future if the yen records further massive weakening - analysts estimate that the Japanese banking sector could benefit from the decision - this was the best performing of all 33 segments today;
- In the Asian session, shares of Japanese semiconductor manufacturers lost the most heavily. Screen Holdings and Advantest, among others, which also has considerable exposure to China. After a 20% monthly rally, Toyota Motor shares also saw a correction.
Looking at JAP225 contracts, on the M15 interval, we see that the price drop below the SMA200 and SMA100 is not unusual (gray zones) - the correction was something quite normal in the recent rally. However, the key may be the fact that despite the recently defended momentum, the index has returned to declines faster than usual. An important level could be 33,150 points - if the price falls below this level we could see a pullback towards 32,600 points - the local peaks from early June. Source: xStation5
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
