Key Points
- Nikkei 225 climbs to 43,399.15, up 0.19%, marking its second consecutive record high.
- Softer U.S. CPI and Trump’s tariff pause lift global equities and boost rate cut bets.
Global equities rallied midweek after U.S. inflation data landed slightly below forecasts, reinforcing expectations for a September Federal Reserve rate cut. The MSCI All Country World Index touched an all-time high of 950.13, while Wall Street futures gained as traders priced a 94% chance of easing next month, up from 57% a month ago.
In Japan, sentiment was further supported by a Reuters poll showing manufacturers’ confidence improving for the second straight month, alongside wholesale inflation easing in July.
Paired with the Bank of Japan’s view that cost pressures from raw materials will continue to fade, equities are expected to have more breathing room. President Donald Trump’s 90-day pause on triple-digit Chinese import tariffs added to the tailwind for exporters.
The Nikkei 225 rose for the sixth straight session, surging past the 43,000 mark for the first time and closing at 43,399.15, up 84 points. Gains were broad-based, with technology and defence stocks leading the charge in line with global risk appetite.
Technical Analysis
The Nikkei 225 has seen a strong recovery since its April low of 30,397, climbing steadily to its current level of 43,399. The price has broken above previous resistance levels, with the short-term moving averages trending firmly upward and well above the longer-term MA, indicating sustained bullish momentum.
The MACD is also in positive territory with a widening gap between the MACD and signal lines, reinforcing the strength of the current uptrend.
In the short term, the key area to watch is the 43,400–43,500 zone, which could act as a near-term resistance. A clean breakout could open the way toward 44,000 and higher.
If the index faces rejection, initial support sits around 41,500, with stronger backing near 39,800. As long as the index holds above its rising 30-day MA, the bullish bias remains intact.
Cautious Forecast
Sustaining a daily close above 43,000 could see the Nikkei 225 target 44,000 in the near term, particularly if global equities remain buoyed by rate cut optimism and Japan’s domestic data holds firm. A pullback below 43,000 would likely trigger profit-taking, with the next key floor at 41,500.
