Key Points
- Nikkei 225 closes at 34,241.92, up 1.34% from the previous day’s low of 33,566.92.
- Japan’s economy minister meets with U.S. officials in DC; President Trump calls talks “big progress”.
- Exporter stocks rally as the yen weakens, boosting sentiment across auto and chip sectors.
Japanese equities regained momentum on Thursday, with the Nikkei 225 rebounding 1.34% to close at 34,241.92, supported by a weaker yen and signs of diplomatic headway as Tokyo kicked off trade negotiations in Washington. After a steep 1% drop on Wednesday, Thursday’s rally saw broad-based gains, led by exporters and semiconductor-linked names.
Trade Talks Fuel Optimism
Japanese Economy Minister Ryosei Akazawa met with U.S. Treasury Secretary Scott Bessent, Trade Representative Jamieson, and—unexpectedly—President Trump, who described the talks as making “big progress.” Akazawa confirmed that currency policy was not discussed, prompting a bounce in the dollar-yen pair, which in turn supported exporter sentiment on the Nikkei.
A weaker yen typically benefits Japanese equities, as it boosts the repatriated value of overseas earnings for major exporters like Mazda (+2.1%) and Toyota (+0.6%). Chip stocks also bounced after heavy selling the prior day, with Advantest (+3%) leading the rebound ahead of TSMC’s earnings and Disco’s results later in the session.
Jefferies analysts, however, cautioned that the Nikkei may struggle to push beyond the 35,500 mark over the next year, citing uncertainty tied to Trump’s escalating global tariff plans.
Technical Analysis
The Nikkei225 has shown a resilient recovery after dipping to a low of 33,566.92 earlier in the session. The index has since climbed steadily to 34,241.92, closing just shy of key resistance around the 34,250–34,400 zone. This rebound has brought the price back above the 30-period moving average, and the 5MA and 10MA are now sloping upward—suggesting bullish short-term momentum.
Picture: Nikkei claws back losses with bullish momentum building above 34,000, as seen on the VT Markets app
The MACD confirms the strength of the reversal, with a clear bullish crossover below the zero line and a strong expansion in green histogram bars. If momentum sustains, bulls could target the prior high near 34,600, while support sits at 34,000 and then 33,800 for any downside retracements.
Cautious Outlook
While Thursday’s rebound reaffirms short-term technical support around 33,550, the Nikkei must clear 34,400–34,600 resistance to resume a sustained upward trend. With currency tailwinds and trade optimism supporting the near-term, attention now shifts to chip earnings and next steps in U.S.–Japan trade talks, which could inject further volatility.
