This week, movement to test the expected 28,000 yen as planned
Last week the Nikkei 225 rose in tandem with the Dow Jones Industrial Average as U.S. gains continued, and a short squeeze also lured buyers, leading to a futures-driven close at a high of 29,222 yen, up 353 yen on Wednesday the 17th.
Therefore, the favorable supply-demand balance for buyers waned, and in the lead-up to this week’s Jackson Hole Conference (25–27) and Chairman Powell’s speech on the 26th, caution rose. This week, within a range of 28,000 to 29,300 yen, the price was expected to test 28,000 yen while treating 29,222 yen as a near-term peak.
As predicted, the pause occurred this week, and on Monday the 22nd, it fell 135 yen to 28,794 yen. After-hours in the U.S. market on the same day showed continued rise in long-term interest rates to the 3.02% vicinity, leading to selling in growth stocks, with the Dow Jones down 643 points to 33,063, the Nasdaq down 323 points, and the S&P down 90 points, all three major indices plunging.
In response, on Tuesday the 23rd, the Nikkei dropped sharply by 341 yen to 28,452 yen, breaking below 28,500 yen for the first time in four days.
And today, Wednesday the 24th, strong vigilance about U.S. monetary tightening and overpriced high-priced issues led to selling.
Over these three days, with the Dow down for three consecutive days and with the Jackson Hole Conference and Powell’s speech on the 25–27 and 26 approaching, today closed at 28,313 yen after testing as low as 28,282 yen.
Depending on what is said at the Jackson Hole Conference and Powell’s speech, there may be a scene where 28,000 yen is tested. For the moment, a rebound is likely.
However, even if events pass, there is a possibility of testing 29,222 yen again, but it may be wise not to expect a decisive return to an upward trend beyond that.
That is because the factors behind persistent inflation—oil and commodity prices—remain high, and overall prices have stopped falling, reinforcing a sense of a bottoming out.
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