Nikkei 225 Tests Key Resistance Level After Strong Japan GDP Data

The Nikkei 225 surged to the highest level since August 1990 after the relatively strong economic data from Japan. The index is trading at ¥30,000, which is 335% above the lowest level in 2020.

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NAS100 (11294)

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Nikkei 225 news: Japanese stocks rose today as investors reacted to the relatively strong Japan’s GDP numbers. According to the Ministry of Finance, the country’s economy expanded by 3.0% in the fourth quarter leading to an annualised increase of 12.7%. This performance was better than the expected increase of 2.3% and 9.5%, respectively. 

The data showed that the performance was driven by a 2.2% increase in private consumption, a 1.0% increase in external demand and a 4.5% increase in capital expenditure. The performance was also mostly because of the large stimulus packages offered by the Japanese government. 

Top Nikkei performers: The top performers in the Nikkei 225 index are Ebara, Olympus, Hino, Hitachi Construction, and JGC Corp. These firms have gained by more than 4%. On the other hand, the laggards are Rakuten, Toho, Subaru, and Nissan Motors. Other automakers like Mitsubishi, Mazda, and Toyota have also underperformed.

Nikkei 225 technical outlook

The Nikkei 225 index has been on a strong uptrend recently. It has moved above the 25-day and 50-day exponential moving averages while the Relative Strength Index (RSI) has moved close to the overbought level. In my view, the uptrend will likely continue in the near term as investors attempt to move above ¥30,000. However, a decline below the support at 27,645 will invalidate this trend.

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