{"id":26956,"date":"2025-07-22T07:55:25","date_gmt":"2025-07-22T07:55:25","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=26956"},"modified":"2025-07-22T07:55:25","modified_gmt":"2025-07-22T07:55:25","slug":"nikkei-softens-as-traders-eye-policy-continuity","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/nikkei-softens-as-traders-eye-policy-continuity\/","title":{"rendered":"Nikkei Softens as Traders Eye Policy Continuity"},"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-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image_fx-86-1024x559.png\" alt=\"\" class=\"wp-image-20961\" \/><\/figure>\n\n\n\n<p><strong>Key points <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Nikkei 225 closed at 39,775, down 0.11%, while the broader Topix Index inched up 0.06% to 2,836 <\/li>\n\n\n\n<li>Political continuity under PM Shigeru Ishiba calms investor nerves as Japan enters delicate tariff talks with the US<\/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 Nikkei 225 ended Tuesday\u2019s session marginally lower, down 0.11% to 39,775, despite a brief spike to 40,263.65 before midday. The broader Topix Index rose 0.06% to 2,836. Both indices reflect a Japanese market in wait-and-see mode after the weekend\u2019s upper house elections.<\/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 election outcome may put the central bank in a double bind as prospects of big spending could keep inflation elevated while potentially prolonged political paralysis and a global trade war provide compelling reasons to go slow on rate hikes <a href=\"https:\/\/t.co\/rSdLXD7syC\">https:\/\/t.co\/rSdLXD7syC<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1947515708671205758?ref_src=twsrc%5Etfw\">July 22, 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 ruling coalition\u2019s loss of its majority, while already priced in by markets, briefly dented momentum. Traders held back from fresh positioning until confirmation that Prime Minister Shigeru Ishiba would stay in power.<\/p>\n\n\n\n<p>That confirmation came swiftly\u2014alongside Ishiba\u2019s statement that he would lead Japan through <a href=\"https:\/\/t.co\/flB4qcUeii\" target=\"_blank\" rel=\"noopener\" title=\"\">upcoming tariff negotiations<\/a> with the United States.<\/p>\n\n\n\n<p>Investors took solace in that continuity. The risk of political vacuum\u2014a concern that could have spooked foreign inflows\u2014appears to have been averted. For now.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>On the technical front, the Nikkei surged to a session high of 40,263.65 before retreating sharply to a low of 39,578.65. Price action traced a steep drop during the second half of the trading day before stabilising near the 39,800 level. It closed at 39,816.65, slightly off the day\u2019s open of 39,778.15.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/1_image-22.jpg\" alt=\"\" class=\"wp-image-26957\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: The Nikkei 225 just pulled off a textbook rebound, 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>The MACD indicator shows the beginning of a bullish crossover, but momentum remains weak. Traders may treat this as an early signal, not a confirmation.<\/p>\n\n\n\n<p>Meanwhile, the 15-minute MA (5,10,30) hints at a near-term recovery after the post-lunch drop, though resistance remains around the 40,000 level.<\/p>\n\n\n\n<p>The candlestick pattern at the end of the session suggests indecision.<\/p>\n\n\n\n<p>If the MACD histogram continues to print higher bars and price holds above the 39,700 support, a push back toward 40,000 remains possible\u2014but momentum will likely be tentative.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>While the immediate political fallout has been contained, upside in the Nikkei will hinge on how Japan handles upcoming US tariff negotiations.<\/p>\n\n\n\n<p>Any misstep <a href=\"https:\/\/t.co\/UeWzELsSYf\" target=\"_blank\" rel=\"noopener\" title=\"\">could weigh heavily<\/a> on exports and broader equity sentiment. Traders should also monitor the yen for signs of strength, which could apply downside pressure on large-cap exporters.<\/p>\n\n\n\n<p>Volatility may remain compressed until key macro signals emerge.<\/p>\n\n\n\n<p>For now, dips toward 39,600\u201339,500 may attract buyers, while rallies above 40,200 could meet resistance unless fresh catalysts surface. The cautious bull remains in play\u2014but only just.<\/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","protected":false},"excerpt":{"rendered":"<p>Markets digest Japan\u2019s upper house results while keeping a close watch on tariff talks and domestic sentiment. &#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-26956","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-ca\/wp-json\/wp\/v2\/posts\/26956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=26956"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/26956\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/20961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=26956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=26956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=26956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}