Japan's Nikkei stock index closed yesterday's session at 33-year highs last seen in 1989, above 33,000 points, and today contracts on the index (JAP225) extend gains, ahead of the Fed decision. The index is being driven by a weakening yen and rallies in the stocks of Japan's largest companies, - yesterday Toyota (TM.US) shares in particular added to the gains. The rally of Japan's Nikkei was fueled by the US S&P 500 and Nasdaq indices, which yesterday recorded their highest closes in 14 months.
- After the release of US inflation data Wall Street is more sure that the Fed will not raise interest rates in June. Tachibana Securities pointed out, a significant improvement by global investors regarding the Japanese market - primarily large inflows into the stocks of Japan's largest companies and the automotive sector like Toyora, Honda Motor (HMC.US), Mazda. Toyota informed that it had overcome a technical hurldes (solid-state batteries) and will start produce more efficient, faster-charging versions of current batteries to improve EV driving range and cost;
- Among all Tokyo sub-indexes, it was the automaker segment that gained the most strongly (over 4.2% growth). It is worth noting, however, that shares of this sub-index have behaved quite poorly in recent months and still have a considerable loss to the benchmark average - it seems that they are striving to close the gap;
- The stocks of other companies related to the auto market (including manufacturers of EV batteries), industrial conglomerates like Kobe Steel, and shares of technology investment fund SoftBank also performed well. Slightly weaker on the Japanese trading floor were chipmakers linked to the still-weakening Chinese market like Advantest and Screen Holdings.Â
Contracts on the Nikkei (JAP225) rose euphorically and are trading near 33,600 points. In case of a correction, the main support could be set by the previous peaks of February and September 2020, at 30,500 points. 
Source: xStation5
