Key Points:
- Nikkei 225 climbs 0.3% to close at 37,116.15; Topix edges up slightly.
- Gains mirror Wall Street despite ongoing US trade policy uncertainties, with Yen strength at five-month highs limits market upside potential.
- Japan reports current account deficit in January; real wages fall 1.8% YoY.
- Technology sector leads gains, bolstering overall market sentiment.
Japanese Stocks Recover, Yen Strength a Concern
Japan’s Nikkei 225 gained modestly to close at 37,116.15, tracking positive cues from Wall Street on Friday, despite traders remaining cautious amid volatile US trade policies under President Trump.
The stronger yen, hovering at a five-month high, posed a challenge for the market, especially for export-heavy stocks.
Technical Analysis
Picture: Nikkei 225 holds near 37,116.15, testing key levels as momentum shifts–as seen on the VT Markets app.
Nikkei 225 declined 0.09%, closing at 37,116.15 after opening at 37,148.00. The index reached a high of 37,145.65 and a low of 36,687.65, showing slight bearish pressure.
The moving averages (MA 5,10,30) indicate a mixed trend, with price attempting to recover after a recent dip. The MACD (12,26,9) histogram is turning positive, suggesting a potential shift in momentum.
Key support is at 36,455.15, while resistance is seen at 37,457.15. A breakout above resistance could extend gains, while failure to hold above 37,000 may lead to renewed selling pressure.
Economic Data Highlights Domestic Pressures
Japan recorded a current account deficit in January—the first in two years—as imports significantly exceeded exports.
Meanwhile, inflation-adjusted real wages fell 1.8% year-on-year, reversing two months of positive momentum and raising questions about the strength of domestic consumption.
Nevertheless, solid performances from technology stocks provided market support, including Disco (+2.2%), Lasertec (+2.6%), and Advantest (+0.9%).
Market Outlook
Traders should closely monitor currency movements and US trade developments, as continued yen strength could cap further advances in Japanese equities, while clarity on trade policy could offer renewed market confidence.
