For now, attention is on whether it can break above the post-bubble high of 33,772 yen
The forecast for this week basically suggests that the resilience will continue, with the S&P entering a bull market, and if the U.S. Dow Jones averages rise clearly, it is anticipated that the Nikkei Stock Average will initially target 34,000 yen.
However, in the short term, caution is advised as there may be a slowdown in foreign buying and an increase in profit-taking selling.
As mentioned before, looking at the monthly chart, from January to June there has been a streak of bullish monthly candles, and if that continues, the probability of a peak forming in June increases.
So far, the high of 33,772 yen on June 19 has been the post-bubble high, and if there is a near-term decline after this peak, it could enter a pattern where this level becomes a peak and test the downside.
On Monday the 19th, a weaker yen and stronger dollar led to a buying bias, opening at 33,768 yen with a △62 movement, hitting a high of 33,772 yen, and the pre-close was at 33,724 yen with a △18 movement. However, in the afternoon the yen's weakness subsided and futures led a decline, dropping to as low as 33,231 yen, ▼474, and the closing price was a significant drop at 33,370 yen, △335. On Tuesday the 20th, with the U.S. market closed the previous day and European stocks falling, the Nikkei average fell briefly to 33,089 yen, ▼281, led by futures, with the pre-close at 33,161 yen, ▼208. However, as the yen weakened to around 142 per dollar, the market recovered toward the close, finishing slightly higher at 33,388 yen, △18. On Wednesday the 21st, in the U.S. market the previous day, the three major indices all declined, and the Nikkei average fell early to 33,154 yen, ▼234. Afterward, selling subsided and with futures buying, it reversed to an uptrend, reaching 33,533 yen, △144, at the pre-close. The afternoon session remained solid, ending at 33,575 yen, △186.
For the time being, movement up and down continues, and if it cannot break above the high of 33,772 yen on the 19th, it will move toward confirming the lower bound.
Foreign investors have been net buyers in both spot and futures for 11 consecutive weeks through the second week of June (12–16). Against the backdrop of disinflation, corporate reforms, and growing attention to Japanese stocks, interest remains elevated.
However, while following the strong trend is基本, liquidity is abundant and has surged to over 4700 yen, so care is needed to avoid overspeeding.
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