Current trend

The leading Japanese stock index NI 225 is correcting in a downtrend near the 38820.0 mark against the background of an increase in the cost of borrowing by the Bank of Japan.

Today, the Japanese regulator changed the parameters of monetary policy, raising the interest rate to 0.25% from 0.10% (seven of the nine members of the bank's board voted for this decision), and also adopted a long-term program to reduce the volume of government bond repurchases (JGB), which will last until 2026: until the period from January to March 2026, the agency intends to reduce the buyback to about 3.0 trillion yen, and the reduction step will be 400.0 billion yen per quarter. At the moment, the volume of repurchases is about 5.7 trillion yen, so by the end of the third quarter it is planned to be reduced to 5.3 trillion yen, and by the end of 2024 it should not exceed 4.9 trillion yen.

Against this background, there is an increase in volatility in the debt market: the yield rate on 10-year bonds increased to 1.056% from 1.002%, on 20-year bonds — to 1.838% from 1.799%, and on 12-month bonds — to 0.254%, which means an increase of 34.39% per day.

The growth leaders in the index are Denso Corp. ( 4.92%), Resona Holdings Inc. ( 5.81%), Daiichi Sankyo Co. Inc. ( 5.13%), Shimizu Corp. ( 4.76%).

Among the leaders of the decline are Oriental Land Co. Ltd. (-7.14%), Murata Mfg. Co. Ltd. (-5.12%), ANA Holdings Inc. (-3.17%).

Support and resistance

On the D1 chart, the price is approaching the support line of the ascending channel with dynamic boundaries of 41000.0–39000.0 for reverse testing.

Technical indicators are preparing to continue strengthening the previously received sell signal: the AO histogram forms new descending bars, and the fast EMAs on the Alligator indicator move away from the signal line, expanding the range of fluctuations.

Support levels: 38100.0, 36450.0.

Resistance levels: 39400.0, 41300.0.

Trading tips

In the event of a reversal and the continued decline of the asset as well as price consolidation below the support level of 38100.0, sell positions with the target of 36450.0 may be opened. Stop-loss – 38700.0. Implementation period: 7 days and more.

In case of continued growth of the asset, as well as consolidation above the resistance level of 39400.0, buy positions with the target of 41300.0 will be relevant. Stop-loss – 39000.0.