Insights 
VT 
Key Points
- Nikkei 225 rises 0.92%, closing at 38,086.65.
- Advantest surges 4.86%; Socionext leads gains with a 7.34% rally.
- MACD shows fading bullish momentum; price stabilises after testing 38,176.65 resistance.
Japan’s Nikkei extended gains into Monday’s session, lifted by a convergence of diplomatic thaw and sector-specific tailwinds. Traders welcomed signs of progress between Washington and Beijing, as trade officials convene in London following a Trump–Xi phone call late last week. While the full scope of the talks remains uncertain, the semiconductor sector is already responding with conviction.
Chip-testing equipment maker Advantest rose 4.86%, becoming the biggest point contributor to the index, while Socionext soared 7.34%, topping the leaderboard in percentage terms. Broader sentiment was buoyed by hopes that restrictions on high-tech shipments may begin to ease, a development seen as a potential lifeline for Japan’s chip-heavy export economy.
SoftBank Group, a core Nikkei heavyweight with strong AI exposure, surged 4.98%. Disco, another chip equipment maker, gained 3.24%. On the healthcare front, Otsuka Holdings jumped 5.27% after reporting favourable Phase III data for its kidney treatment candidate — a rare fundamental catalyst in a risk-on session otherwise dominated by geopolitical speculation.
Technical Analysis
Technically, the Nikkei 225 touched a session high of 38,176.65 — a level that now appears to form a short-term resistance band. The MACD histogram, while still in positive territory, shows signs of softening momentum, hinting at buyer fatigue as the index consolidates above 38,000.
Picture: Nikkei 225 holds near highs as bullish momentum cools, as seen on the VT Markets app
Price action remains well above the 5-, 10-, and 30-period moving averages on the 15-minute chart, suggesting short-term bullish control. However, with volume thinning into the close and no fresh catalyst until after the trade talks conclude, a sideways range between 37,850–38,200 could develop.
Should talks break positively, a breakout toward April’s highs near 38,400 may follow. Conversely, a stall in negotiations could spark profit-taking, especially among the recent outperformers in the chip segment.
Fundamental Outlook
The focus now shifts to any immediate headlines from the U.S.–China meeting. Trump’s remark that rare earth supply will “no longer be a problem” for the U.S. may indicate forthcoming flexibility, but the credibility of that claim — and whether it leads to actual policy shifts — remains to be seen.
Meanwhile, underperformance at the index’s lower end continues to weigh. iSpace fell by its daily limit of 20% for a second straight session after its lunar lander failed to touch down successfully — a stark contrast to the optimism in the rest of the tech complex.
Cautious Forecast
With the Nikkei now resting just below short-term resistance, any upside will likely hinge on clear progress from the London talks. Until then, traders may tread water near current levels. Watch for a MACD crossover or a retest of the 37,850 support zone for clues on next direction.
