【Fujitomi】Nikkei Stock Average fails to recover to 20,000
The Nikkei Stock Average rose for the first time in three trading days, closing at 19,919.82 yen, up 49.97 yen (0.25%) from the previous day. Buoyed by the rally in U.S. stocks and a rise in crude oil prices, the Tokyo Stock Exchange saw buyers prevail. It briefly climbed to 19,998 yen, up 128 yen from the previous day, but did not reach 20,000 yen. Thereafter, the dollar faced resistance and the market turned slightly lower at times.
Last week, President Trump reportedly built a dollar-selling position after reports that he disclosed confidential information about the extremist organization Islamic State to Russian Foreign Minister Sergey Lavrov and Russia's ambassador to the United States, Kislyak, during a White House visit. The White House has denied the reports.
Near the 20,000 level, in addition to selling to await a reversal at a key level, there was observed defensive selling in futures tied to linked notes, suggesting a heaviness in the upside. Moreover, the Topix's 25-day moving average ratio exceeded 140%, signaling a potential short-term overheating concern.
The TOPIX also rose for the first time in three trading days, finishing up 4.23 points (0.27%) at 1,584.23. The trading value on the Tokyo Stock Exchange First Section was 2,660.3 billion yen, and the trading volume was 2.17425 billion shares. The number of rising issues on the First Section was 1,130, declining 767, and 118 were unchanged.
Nikkei futures for June settled briefly above 20,000 yen but did not sustain a breakout. There was a precedent of futures reaching 20,000 yen on the 11th as well, so a short-term double top is conceivable. As support lines, the turning line (19,590 yen) and the filling of the gap from the 8th (19,480–19,710 yen) are anticipated.
