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NI 225 Bond Market Responds to Japan's Supplemental Budget

12/5/2022 1:16 PM

The leading Japanese stock index NI 225 continues to correct, trading near the level of 27770.0.

Quotes of the trading instrument lose value amid the adoption by the House of Councilors of the Japanese parliament of a bill to allocate 29.9 trillion yen to mitigate the negative impact of record inflation on the national economy, which will be attracted through the issuance of government bonds and securities. The funds will be used to compensate for the increase in the cost of electricity and fuel (up to 7.82 trillion yen), as well as to combat the consequences of the coronavirus and support the New Capitalism program, which was announced by Prime Minister Fumio Kishida.

In turn, the bond market is still holding on to highs: the leading 10-year Treasury bonds are traded at a rate of 0.247%, and the conservative 20-year ones are traded at 1.089%. 1-year bonds are still close to the refinancing rate, trading at a negative yield of -0.085%.

The growth leaders in the index are Eisai Co. Ltd. (+4.71%), Shiseido Ltd. (+3.01%), Yaskawa Electric Corp. (+2.98%), Fanuc Corp. (+2.68%).

Among the leaders of the decline are Olympus Corp. (-3.56%), Resona Holdings Inc. (-3.17%), Nissan Motor Co. Ltd. (-2.82%).

On the daily chart of the asset, the price remains within the local ascending corridor, heading towards the support line.

Technical indicators holding a buy signal are ready for a reversal and a new sell signal: the histogram of the AO oscillator is forming new descending bars and the fast EMAs on the Alligator indicator are approaching the signal line.

Support levels: 27400.0, 26500.0. | Resistance levels: 28100.0, 28640.0.

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