{"id":26717,"date":"2025-07-18T08:45:12","date_gmt":"2025-07-18T08:45:12","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=26717"},"modified":"2025-07-18T08:45:12","modified_gmt":"2025-07-18T08:45:12","slug":"nikkei-slips-as-elections-shake-tokyos-calm","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/nikkei-slips-as-elections-shake-tokyos-calm\/","title":{"rendered":"Nikkei Slips as Elections Shake Tokyo\u2019s Calm"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image_fx-86-1024x559.png\" alt=\"\" class=\"wp-image-20961\" \/><\/figure>\n\n\n\n<p><strong>Key Takeaways<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Nikkei 225 closes down 0.2% at 39,819, weighed by tech stocks and political jitters<\/li>\n\n\n\n<li>Disappointing US-bound export data stirs trade concerns ahead of August deadline<\/li>\n\n\n\n<li>Softer inflation offers the BoJ cover to hold rates, tempering the downside<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The <strong>Nikkei 225<\/strong> came under pressure Friday, closing at <strong>39,819<\/strong> after briefly testing resistance near <strong>40,133.65<\/strong> earlier in the session. What began as a mild attempt to extend Thursday\u2019s gains quickly unravelled into cautious selling, driven by a mix of macro uncertainty, election anxiety, and disappointing trade data.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Japanese government bonds rallied Friday, with yields dropping across maturities, ahead of Sunday\u2019s closely-watched upper house election <a href=\"https:\/\/t.co\/IimFxyWeMt\">https:\/\/t.co\/IimFxyWeMt<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1946095151857741981?ref_src=twsrc%5Etfw\">July 18, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The <strong>Topix<\/strong> mirrored the move, dipping 0.2% to <strong>2,834<\/strong>, as market participants chose to de-risk ahead of <strong>Japan\u2019s Upper House election<\/strong> this weekend.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Trade Tensions Weigh on Tech Stocks<\/h2>\n\n\n\n<p>One of the bigger drags came from Japan\u2019s <a href=\"https:\/\/t.co\/39a86klTRY\" target=\"_blank\" rel=\"noopener\" title=\"\">high-flying electronics and semiconductor names<\/a>, which reversed sharply amid fears that strained trade ties with the US could begin to bite.<\/p>\n\n\n\n<p>Disco Corp plunged 8.8%, Advantest fell 4.4%, and Sony Group slid 2.2%, with Keyence Corp dropping 0.6%. The June trade data didn\u2019t help\u2014shipments to the US dropped sharply, raising red flags just weeks before a key trade deadline in August.<\/p>\n\n\n\n<p>Yet despite the drop, there\u2019s a degree of resilience underneath. For the week, the Nikkei still managed to gain 0.4%, bouncing back from last week\u2019s losses. That modest lift has largely been credited to Japan\u2019s <a href=\"https:\/\/t.co\/S7M4BpMqoi\" target=\"_blank\" rel=\"noopener\" title=\"\">latest inflation print<\/a>, which came in lower than expected.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Japan&#39;s core inflation slows but stays above BOJ target, keeps hike bets alive <a href=\"https:\/\/t.co\/PHcLKeZWN9\">https:\/\/t.co\/PHcLKeZWN9<\/a> <a href=\"https:\/\/t.co\/PHcLKeZWN9\">https:\/\/t.co\/PHcLKeZWN9<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1946091359191876086?ref_src=twsrc%5Etfw\">July 18, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>With inflationary pressure softening, the Bank of Japan is now seen more likely to hold rates steady, giving equities some breathing room\u2014at least in the short term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>Nikkei 225 saw a sharp rejection from its peak of 40,133.65 earlier in the session, triggering a steep drop that found support around 39,725. The price has since stabilised, but it&#8217;s trading just under the 30-period moving average, suggesting the pullback hasn&#8217;t been fully neutralised.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-19.jpg\" alt=\"\" class=\"wp-image-26718\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: Nikkei trims gains after hitting 40,133. MACD hints at recovery, but bulls need to reclaim 39,800+, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>Short-term moving averages (5 and 10) remain compressed and below the 30-MA, signalling caution. However, MACD shows early signs of bullish crossover with bars flipping green and lines curling upward\u2014hints of a recovery attempt. That said, a break above 39,800 is needed to regain upward momentum. Failing that, price may consolidate or retest the 39,700 area.<\/p>\n\n\n\n<p>Watch for a move above the 30-MA for confirmation of bullish continuation.<\/p>\n\n\n\n<p>Looking ahead, the Nikkei faces a storm of potential catalysts. The outcome of the weekend election, clarity (or lack thereof) on the <a href=\"https:\/\/t.co\/0Gpj2zB098\" target=\"_blank\" rel=\"noopener\" title=\"\">US-Japan trade track<\/a>, and any signals from the BoJ\u2019s next move could all shift the dial rapidly.<\/p>\n\n\n\n<p>Until then, traders may prefer to stay on the sidelines, hoping the market doesn\u2019t punish hesitation too harshly.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*5vyjdn*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTE4NzkxMDYkbzMwOCRnMSR0MTc1MTg3OTExOCRqNDgkbDAkaDA.*_ga_6XQ8153GYW*czE3NTE4NzkxMDgkbzU3JGcxJHQxNzUxODc5MTE4JGo1MCRsMCRoMA..*_ga_BG6LYEHPX1*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMTgkajUwJGwwJGgw*_ga_J8BRGZSREX*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_7CG6454YR5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_69Z54R4H9N*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_CY2VCKFC3C*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_TXZ07R2C21*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_17TMGY9BBE*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_MWDVVSEVL5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_2QCC3S2748*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_E7D2PCX624*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_XJ4037XKK6*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_EJCVQDC7VT*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjYkajQyJGwwJGgw\" target=\"_blank\" rel=\"noopener\" title=\"\">start trading<\/a> now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Nikkei 225 drops amid tech weakness, election nerves, and trade fears with the US. Softer inflation data cushions the fall, but pressure mounts. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":20961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[11,30],"class_list":["post-26717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-indices","tag-nikkei"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=26717"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/26717\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/20961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=26717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=26717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=26717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}