In phase of recovery since late 2011, the NIKKEI has reached a major long-term goal located near 10100/10150 points after an increase of over 20%.
The Japanese stock market has indeed benefited from monetary easing by the Bank of Japan. These actions combined with a notable resurgence in risk appetite in financial markets caused a sharp drop in the yen, which lost 5.6% against the dollar last month. This fall in the yen, which has lost some of its safe haven status, has led to a strong rebound in export values such as Sony and Nissan Motor.
Technically, the Japanese index maintains an upward trend in weekly data over the 9580 points and the 20-weeks moving average has significantly turned upward. The Japanese index is likely to be confronted with the very strong resistance area of 10 100 / 10 150 points, corresponding to the upper limit of a bearish-channel weekly drawn in blue on the chart.
We remain careful when approaching this area that would allow investors to take some profits. Only one crossing up of this area will give a new bullish signal for rally towards 10,500 points.
However, a lapse under the 9880 points will allow a consolidation toward 9580 points.
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