Nikkei | Another Breakout Soon?
Fundamental approach:
- The Nikkei 225 advanced this week, supported by the BoJ's upgraded GDP forecasts and steady policy stance.
- Tech stocks led gains amid AI optimism, with SoftBank surging over 11% and Screen Holdings rising nearly 10%, snapping a prior losing streak. The BoJ held rates at 0.75% while lifting the 2026 GDP outlook to 1% from 0.7%, signaling confidence despite cooling Dec inflation at 2.1%.
- The index could extend gains amid snap-election risks, with upcoming US economic data and Nvidia's comments as key catalysts.
Technical approach:
- After correcting toward EMA21, JP225 bounced and retested the previous swing high. The index is above both EMAs, indicating a strong bullish trend is in place.
- If JP225 breaches above the resistance at 54120, it may advance to test the 100%-127.20% Fibonacci Extension at around 55226-56137.
- On the contrary, remaining below 54120 may prompt the index to retest EMA21 and the support at 52500.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness