Key Points:
Japan’s Nikkei index retreated 1.52% to 39,000.15, driven by Wall Street’s overnight fall and rising U.S. Treasury yields.
Picture: The Nikkei225 retraces to 39,000, facing resistance after reaching a high of 39,833 as traders eye U.S. data for market direction, seen on the VT Markets app.
Looking at the chart, we’re seeing the Nikkei show a retracement after a sharp rise to 39,833.65. The price is now consolidating around the 39,000 level after hitting a recent low of 38,654.
The MACD is showing signs of potential bullish momentum recovery, though it remains below the signal line, suggesting that a breakout may still be on hold.
The price is likely to test the 39,000 mark again, and if it breaks above the 50-period moving average, further upward momentum could bring it to the 39,500 resistance level.
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Traders should also keep an eye on U.S. inflation data and Federal Reserve talks later this week, as these events may impact global equities, including the Nikkei.
The Topix index also dipped nearly 1%, reflecting broader market concerns after last Friday’s strong U.S. jobs report.
The resulting rise in U.S. yields, with the 10-year yield climbing to its highest since August, dampened sentiment as traders reduced expectations for another large rate cut.
Recent geopolitical tensions, particularly in the Middle East, along with U.S. jobs data, have driven concerns over oil prices and higher yields, which in turn affect risk sentiment.
This explains part of the retracement seen on the Nikkei, which is sensitive to external market factors like Treasury yields and global energy prices.
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