Insights 
VT 
Key Points
- Nikkei 225 slips 0.42% to 43,606.65 after profit-taking from record highs.
- SoftBank falls 2% on Intel investment report, while Sanrio and Mitsubishi UFJ also decline.
The Nikkei 225 pulled back on Tuesday, sliding to 43,606.65 after hitting record highs in recent sessions. The broader Topix also edged lower, down 0.1% to 3,118, as traders booked profits and adopted a cautious stance ahead of major macro and geopolitical catalysts.
Focus remains on US President Donald Trump’s push for Russia-Ukraine peace talks, urging President Putin to prepare for a summit with Volodymyr Zelenskiy. Traders are also awaiting Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium later this week, seeking clarity on the central bank’s policy path following mixed inflation and labour market data.
On the corporate front, SoftBank dropped 2% after reports it is preparing a $2 billion investment in US chipmaker Intel. Other notable laggards included Sanrio (-6.5%), Fujikura (-3.2%) and Mitsubishi UFJ (-2%), which collectively weighed on sentiment.
Technical Analysis
The Nikkei 225 has extended its recovery from the April low of 30,397, reaching 43,606 before easing slightly. The overall trend remains bullish, with price action sitting well above both short- and medium-term moving averages, showing that momentum is still in buyers’ favour.
The MACD remains in positive territory, confirming underlying strength, though the histogram is beginning to flatten, hinting that the rally may be losing some near-term steam.
In the short term, resistance sits around 43,600–43,800, where recent highs have capped gains. A breakout here could drive the index toward the 44,500 region. On the downside, support lies at 42,500 and then more firmly at 39,800. As long as the index holds above its rising 30-day moving average, the broader outlook stays constructive, though traders should watch for pullbacks after the strong multi-month rally.
Cautious Forecast
If Powell strikes a dovish tone at Jackson Hole, Japanese equities could quickly retest the highs, potentially pushing the Nikkei back above 44,000. Conversely, a hawkish signal or renewed geopolitical tension may extend profit-taking, with downside risks toward 42,500 and the 41,500 area.
