Current trend

Japan's leading stock index NI 225 is correcting around 39065.0 amid the publication of corporate reports from component companies.

Yesterday, the financial results of industrial sensor maker Keyence Corp. were presented, which recorded an increase in revenue to 268.33 billion yen from 243.81 billion yen a year earlier, as well as an increase in earnings per share (EPS) to 396.6 yen from 387.22 yen. In turn, the machinery company Komatsu Ltd. for the third time in history showed revenue above 1.0 trillion yen at 1.008 trillion yen, which exceeds 923.44 billion yen a year earlier, while EPS decreased to 99.29 yen from 105.87 yen a year earlier. Electronics maker NEC Corp. reported revenue fell to 796.38 billion yen from 842.26 billion yen last year, while EPS were 66.35 yen, compared with a loss of ˗21.9 yen over the previous period.

Bond yields remain stable: the 10-year yield was 0.960% after 0.964% last week, while the 20-year yield adjusted to 1.812% from 1.778%.

The index's top gainers were Fujikura Ltd. ( 7.48%), Lasertec Corp. ( 4.61%), Tokyo Electric Power Co., Inc. ( 3.96%), and SMC Corp. ( 4.04%).

The list of decliners included Hino Motors Ltd. (˗13.72%), Sumitomo Dainippon Pharma Co., Ltd. (˗11.13%), and DeNA Co., Ltd. (˗3.41%).

Support and resistance

On the D1 chart, the price is moving away from the support line of the ascending channel with dynamic boundaries of 42000.0–37500.0.

Technical indicators are preparing to continue strengthening the previously received buy signal: the AO histogram is forming new ascending bars, and the fast EMAs on the Alligator indicator are moving away from the signal line, expanding the range of fluctuations.

Support levels: 38600.0, 36500.0.

Resistance levels: 39800.0, 42200.0.

Trading tips

In case of continued growth and consolidation of the price above the resistance level of 39800.0, buy positions with a target of 42200.0 will be relevant. Stop loss – 39300.0. Implementation period: 7 days and more.

In case of a reversal and continued decline, as well as consolidation of the price below the support level of 38600.0, sell positions with a target of 36500.0 can be opened. Stop loss – 39500.0.