Nikkei 225 Lower After Sharp Declines on Wall Street

Nikkei index finished lower today after weak US manufacturing data reading which came to the lowest reading (47.8) in ten years. Japan government increased the sales tax yesterday by two percentage points to 10%. The hike has postponed before, but now PM Abe said that the tax needs to be raised to cover rising health costs and national debt. Chinese markets are closed for the week to mark 70 years since the founding of the People’s Republic of China. The Hang Seng trading 0.28 lower at 26.009 while Aussie stocks also finished lower after RBA cut interest rates yesterday by 25 bps; the ASX 200 suffered the worst daily loss since August, ended 1.31% lower at 6,654.

Nikkei 225 finished 0.49% lower at 21,778 after Japan September consumer confidence came in at 35.6 below expectations of 36.5. The Japan Monetary Base (YoY) came in at 3% below forecasts of 3.1% in September.

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Nikkei Support and Resistance

The Nikkei retreats today but keeps the positive momentum intact. On the downside immediate support stands at 21,725, today’s low and then at 21,215 the 100-day moving average. A break below that level might accelerate the selloff down to 20,800 the low from September 5th.

On the upside resistance for the Nikkei 225 stands at 21,795 today’s high, a break above, will set the stage for a move up to 22,180 the high from May 7th, which will open the way for a move up to yearly highs at 22,360.

In Asian forex markets USDJPY trading 0.05% lower at 107.67, the Aussie dollar trades 0,05% lower at 0.6701, while NZDUSD trades 0.08% higher at 0.6248 versus USD. Gold trades higher today at 1,481, while WTI crude oil is 0.66% higher at $53.97 per barrel.Download our latest quarterly market outlook for our longer-term trade ideas.

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