Key Points:
The Nikkei 225 index closed lower at 38,282.15 on Monday, reflecting a 0.66% decline amidst broader market weakness.
As seen in the chart, the index faced intraday resistance near 39,110.65 but struggled to maintain higher levels, with sellers driving it down to an intraday low of 37,922.15.
Picture: Nikkei 225 dips 0.66%, struggling near 38,282 as yen volatility and global tech losses weigh, as seen on the VT Markets app.
The chart data aligns with growing market pressures from both external and domestic forces, highlighting the index’s inability to sustain gains despite brief recoveries.
The tech sector struggled as Tokyo Electron shed 2.26%, while SoftBank Group fell 2.31%. Advantest, a supplier to Nvidia, saw volatility ahead of Nvidia’s earnings release on Wednesday.
The Philadelphia Semiconductor Index’s 3.4% drop on Friday continued to weigh on sentiment, highlighting global concerns over inflation and monetary policy.
Drugmakers led the decliners on the Nikkei, with Chugai Pharmaceutical plunging 8.56% after Robert F. Kennedy Jr., known for his controversial stance on vaccines, was appointed as head of the US Department of Health and Human Services.
Automaker shares were hit as the yen appreciated to as strong as 153.84 against the dollar earlier in the session before pulling back to 154.60.
Toyota and Nissan each fell around 1%, with the strong yen reducing overseas earnings and making Japanese equities less appealing to foreign investors.
The yen’s movements followed a speech by Bank of Japan Governor Kazuo Ueda, who avoided strong indications of an imminent interest rate hike. His comments calmed early yen strength, but traders are bracing for further clarity when Ueda addresses the media.
US market weakness also played a role, with Wall Street’s three main indices declining last Friday. Investors are grappling with the dual impact of Trump’s pro-business policy proposals and the potential for heightened inflation, which could temper the pace of Federal Reserve rate cuts.
See also: Week Ahead: Market Digests Trump Trade Policies
Nikkei strategist Kazuo Kamitani commented, “Whether the Trump trade is over or just on pause is not possible to discern at the moment,” adding that market turbulence is likely to persist throughout November.
With Nvidia’s earnings on the horizon and further statements expected from the Bank of Japan, traders should prepare for continued market volatility. The yen’s trajectory remains a key factor for Japanese equities, particularly for exporters, while global tech earnings and US policy shifts will shape broader sentiment.
Cautious strategies focusing on hedging against yen fluctuations and monitoring industry-specific developments may provide stability in this turbulent environment.
As the Nikkei faces headwinds from global and domestic forces, traders should keep a close eye on key economic events and technical levels to navigate the coming sessions effectively.
Official partners:
