Solid News

Nikkei 225, Market Update

7/7/2022 1:57 PM

Current trend

The Nikkei 225 stock index continues to correct, trading near 26448.0.

The Bank of Japan, as planned, exercised its right to an unlimited amount of redemption of government obligations, which it gave itself at the meeting held in early June. Then the regulator bought bonds for a record 16.2 trillion yen, which is the highest rate of intervention in history, significantly exceeding the previous record of 11 trillion yen in 2016. The department makes such purchases in order to keep the interest rate in the negative zone; however, the terms of the buyback program are not indicated, although the total balance in the accounts of the regulator has already exceeded 528 trillion yen, which is about half of all issued bonds.

Against the backdrop of unprecedented actions by the financial authorities, the Japanese bond market continues to rise: popular 10-year Treasuries are trading at a yield of 0.241%, and conservative 20-year ones at 0.892%.

The growth leaders in the index are Aeon Co. (+10.45%), Yokohama Rubber Co. (+6.10%), Z Holdings Corp. (+4.07%), Sumitomo Osaka Cement Co. Ltd. (+4.53%).

Among the leaders of the decline are J.Front Retailing Co. Ltd. (-2.28%), Takashimaya Co. (-2.69%), Keisei Electric Railway Co. (-2.42%).

Support and resistance

On the global chart of the asset, the price remains within the local lateral channel, moving towards the support line. Technical indicators are in a sell signal state: the histogram of the AO oscillator is decreasing in the sell zone, forming new descending bars, and fast EMAs on the Alligator indicator continue to move away from the signal line.

Support levels: 25696.0, 24500.0.

Resistance levels: 26965.0, 28144.0.

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