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Nikkei 225 JPN225 CFD

Trading the BoJ meeting – it’s all about YCCTiming – 31 Oct (no set time – likely between 1 pm to 3 pm AEDT) The tide is turning in Japan and while BoJ policy change is glacial - especially when we consider the intense pace at which other G10 central banks have acted – we’re now hearing that Japanese pension funds are looking are re-weighting of domestic JGBs, with yields on long-end bonds more attractive than holding foreign bonds on a currency-hedged basis. These future re-weightings will involve huge amounts of capital and increase the perception of JPY inflows, and a lasting process of capital moving back to Japan. On the inflation front, we’ve seen Tokyo core CPI coming in line, or beating expectations, in all but 2 of the last 24 readings. With core CPI running at 3.8% and well above the bank's target of 2%, we’ll see some lumpy inflation upgrades tomorrow from the BoJ. So why not start to tighten policy? The simple reason is they haven’t prepped the market fully, and they want to garner real confidence from the Spring Shunto wage negotiations – we should start to hear the outcome of these negotiations in the weeks ahead. All eyes on changes to the YCC band While no one is expecting a move in interest rates away from NIRP (Negative Interest Rate Policy) – that is an early 2024 story - Where we could see some policy change through the widening of the YCC (Yield Curve Control) band. At present, the BoJ cap 10yr JGB (Japan govt bonds) yields at 100bp (or 1%). If we were to see a test of the 1% cap in the near-term the BoJ would buy unlimited amounts of JGBs to confine yields to 1%. Currently, we see the 10-year JGB at 89bp, with yields up 14bp since 16 October. So, sellers have pushed JGB yields towards the cap, with the more freely moving JP 10yr swap sitting above 1% at 1.10% - it’s, therefore, clear that some in the market has positioned for the BoJ to lift the cap to 1.50%, some may even be thinking it's removed altogether. The market’s base case is for no change While 34/45 economists expect no change, given the recent flow and positioning in the JGB market, if the YCC cap remains at 1% then we could see a spike higher in USDJPY and the JPY crosses – I would guess to the tune of 30-50 pips. I would be a buyer on that JPY weakness. This fits in with the reaction we’ve seen in prior BoJ meetings, where since Jan 2022 the JPY has weakened in all but 2 meetings. Could we see the cap lifted to 1.5%? If the BoJ lifts the cap to 1.5%, one suspects this action will be accompanied by supportive rhetoric that they will continue to intervene intraday and buy JGBs to smooth out any overly violent moves. This action would see a more pronounced downside move in USDJPY, perhaps 50-70 pips (at a guess), although the likely accompanying language should limit the reaction. As always, positioning will play a part – where we currently see leveraged funds short of JPY, while real money is modestly long, and retail aggressively long JPY and seeing greater downside risk in USDJPY. One does question why the BoJ doesn’t just get rid of the YCC cap altogether. A scenario which isn't entirely impossible, but would likely send shockwaves through global bond markets, and by extension FX markets too. One could argue that YCC lacks credibility anyhow, given the BoJ seems to move the cap every time the market tests the limit. It simply results in them having to buy greater quantities of outstanding debt and cornering the market. The trade? Over the coming week or so, I see further upside risk in the JPY - My preference for the BoJ meeting though is to stand aside, but place limit sell orders above the market into the meeting. If the BoJ leaves YCC unchanged then positioning should be unwound and I get a fill - I suspect the move will be short-lived and the flow should reverse. CHFJPY is looking like one of the weaker crosses at this point, so selling spikes in CHFJPY looks compelling – and should we get closer to MOF verbal intervention I am on the right side of that too.
Short
by Pepperstone
1
NIKKEI Elliott Wave Analysis for Thursday 26/10/2023In the higher time frame, the primary expectation is that wave (4) is not finished yet. The price action we are seeing after the WXY structure still looks corrective which makes us call for a triple three or WXYXZ structure. In the lower time frame, we have two equally valid scenarios. The way down as a wave Z could have been started. However, we favor the scenario where we first see upside to finish wave X, followed by the wave Z down.
OANDA:JP225USD
by AndyCuckoo
NIKKEI Elliott Wave Analysis for Wednesday 25/10/2023In the higher time frame, the primary expectation is that wave (4) is not finished yet. The price action we are seeing after the WXY structure still looks corrective which makes us call for a triple three or WXYXZ structure. In the lower time frame, we have two equally valid scenarios. The way down as a wave Z could have been started. However, we favor the scenario where we first see upside to finish wave X, followed by the wave Z down.
OANDA:JP225USD
by AndyCuckoo
NIKKEI Elliott Wave Analysis for Tuesday 24/10/2023In the higher time frame, the primary expectation is that wave (4) is not finished yet. The price action we are seeing after the WXY structure still looks corrective which makes us call for a triple three or WXYXZ structure. In the lower time frame, we have two equally valid scenarios. The way down as a wave Z could have been started. However, we favor the scenario where we first see upside to finish wave X, followed by the wave Z down.
OANDA:JP225USD
by AndyCuckoo
NIKKEI Elliott Wave Analysis for Friday 20/10/2023 (+ Higher TF)In the higher time frame, the primary expectation is that wave (4) is not finished yet. The price action we are seeing after the WXY structure still looks corrective which makes us call for a triple three or WXYXZ structure. In the lower time frame, we have two equally valid scenarios. The way down as a wave Z could have been started. However, we favor the scenario where we first see upside to finish wave X, followed by the wave Z down.
OANDA:JP225USD
by AndyCuckoo
Nikkei 225 Reaches Psychological Level at 33,000In 2023, Japan's stock market is in a bullish trend (shown by the blue channel) as the country has an ultra-loose monetary policy (unlike other G7 countries that are fighting inflation). As a result, the cheap yen helps Japanese companies, which are largely export-oriented, to develop. According to the Cabinet of Japan, GDP in the second quarter of 2023 increased by 2% compared to the same quarter of the previous year. The growth of the Japanese stock market from the beginning of the year to today is about 28%. And on Sept. 5, the Nikkei 225 closed above the psychological 33,000 level. Yahoo Finance reports that Kenji Abe, Daiwa Securities equity strategist, predicts the Nikkei could gradually rise to 35,000 after a strong reporting season this summer. Bearish arguments: → the level of 33,000 points can serve as psychological resistance. After the Doji candle on September 6 (which can be interpreted as the uncertainty of market participants in the continuation of growth), the price dropped on the morning of September 7, which confirms the weakening of demand. → line (1), built on the highs of summer, can provide resistance. However, the bullish argument is that the line (1) is an element of the flag technical analysis pattern. If the pattern works, then we should expect its breakdown and the continuation of the trend in 2023. How likely this scenario is can be judged by the depth of the rollback from the line (1), which is already looming on the chart. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:J225
by FXOpen
JP225 to continue in a rally?NIK225 - 24h expiry Short term momentum is bullish. There is no indication that the rally is coming to an end. 32240 has been pivotal. A break of the recent high at 32240 should result in a further move higher. The primary trend remains bullish. We look to Buy a break of 32266 (stop at 32086) Our profit targets will be 32716 and 32816 Resistance: 32240 / 32400 / 32600 Support: 32150 / 31900 / 31750 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.
OANDA:JP225USDLong
by OANDA
JPY 225 - fundamental and technical analysis - we will rise!Fundmental: Given the Bank of Japan's decision to maintain ultra-low interest rates while adopting a more flexible yield curve control policy, coupled with positive market reactions and the potential for policy normalization, there is a strong possibility that the JPY225 index will rise in the coming days. The move indicates confidence in Japan's economic recovery, leading to increased investor interest in Japanese equities. Additionally, ongoing monetary support and higher inflation expectations could further boost the index. However, investors should remain mindful of market fluctuations and global factors that may impact the performance of the JPY225 index. Thechincal We are in side growing trades testing again 33050-33200 level again, probably will not enough strengh so it will be time for correction, after break strong bullish movement
PEPPERSTONE:JPN225Long
by AlgoGains