Nikkei 225 m

Brief: Nikkei 225, Hang Seng, DAX Pulls Back; Ethereum Rises Ahead of ETH 2.0

The Nikkei 225 is down by more than 0.80% in part because of the stronger Japanese yen and the sudden resignation of the CEO of Tokyo’s Stock Exchange. The index is trading at ¥26,443, which is slightly below the intraday high of ¥26,817.

The Japanese yen is up by 0.20% against the US dollar as the latter’s weakness continues to persist. Indeed, the dollar index has dropped to the lowest level since September this year as global risks ease. A stronger yen is usually more problematic for Japanese companies because it makes their goods expensive abroad.

The Nikkei 225 is also falling after Koichiro Miyahara resigned as the CEO of TSX because of an outage that happens on October 1. He will be replaced by Akira Kiyota, the current CEO of Japan Exchange Group.

On a positive note, Japan reported strong industrial production in October. The production rose by 3.8% in October, rising for the fifth straight month. In another data, China’s manufacturing and non-manufacturing PMI rose for the ninth straight month in November. These numbers are positive for the Nikkei 225 constituent companies.

Elsewhere, in Hong Kong, the Hang Seng index declined by more than 1.45% while in mainland China, the Shanghai composite index fell by 0.15%.

In Europe and the United States, futures tied to the DAX index, FTSE 100, Dow Jones, and S&P 500 are down by between 0.75% and 1.32%. The stocks are falling possibly because of profit-taking after a record-breaking month. In November, the S&P500 and Dow Jones all reached record highs after the US election and progress on Covid vaccines.

Meanwhile, after dropping sharply last week, digital currencies have bounced back. Bitcoin price is up by more than 4% in the past 24 hours while Ethereum has added 7.56%. The biggest news this week will be the launch of ETH 2.0, which will be launched tomorrow.

Nikkei 225 technical outlook

The Nikkei 225 index is trading at ¥26,443, which is below the 1991 high of ¥26,817. On the daily chart, it is above all moving averages. It is also above the previous ascending channel that is shown in green while the RSI remains above the overbought level of 70.

Therefore, while odds are for the index to continue rallying, there is also a possibility that a pullback will happen in December. If that happens, the Nikkei could retest the important support at ¥25,000.

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Nikkei index technical chart

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