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The Nikkei 225 surged by 1.15% on Thursday, closing at 39,462.15 as a weaker yen and positive sentiment from Wall Street lifted the index.
Picture: Nikkei’s strong upward trend reached a high of 40,159.15, but recent price action has shown a pullback, as seen on the VT Markets app.
We’re seeing robust upward movement, peaking at 40,159.15, marking a key resistance level after a sustained rally. Moving averages show the 5-period MA is above the 10- and 30-period MAs, which supports the recent bullish trend.
However, in the latest sessions, the price has pulled back to 39,462.15, signaling a possible consolidation or correction phase as traders assess profit-taking opportunities.
The yen’s depreciation against the dollar, which traded around 154.6, provided a tailwind for Japanese exporters, who benefit from a cheaper yen that increases overseas earnings.
A softer yen supported exporters, with chip-testing equipment maker Advantest advancing by 1.14%, providing one of the biggest boosts to the Nikkei.
Banking shares saw strong gains as well, with Sumitomo Mitsui Financial Group rising 6.08% and Mitsubishi UFJ Financial Group up 4.9%, buoyed by rising bond yields and an improved earnings outlook for financials.
Not all sectors benefited from the yen’s decline. Nitori Holdings, a retailer heavily reliant on imported materials, dropped 4.84% as higher import costs offset broader gains within the Nikkei.
However, the index overall showed resilience, supported by tech and financial stocks, as global market confidence surged in response to Trump’s re-election.
See also: USDX Hits Four-Year High as Trump Re-Elected
Traders appear optimistic that Trump’s policies will stimulate U.S. growth, lifting demand for Japanese exports and further supporting Nikkei momentum.
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