NIKKEI 225 HITS 8-WEEK LOW AS US CREATE PRESSURE ON CURRENCY MANIPULATION

Nikkei 225 fell 1.87% to close at 22,271.30 on Monday. This is its weakest closing since 21st August. The index fell as automakers and other manufacturers were hit by news that Washington would seek a provision about currency manipulation in future trade deals, including with Japan.

The broader Topix index dropped 1.6% to close at 1,675.44 on Monday. This is its lowest finish level in almost seven months.

On Monday, the yen strengthened to 111.81(at the time of writing) versus the dollar, building on recent gains, as global risk-off sentiment kept alive safe-haven bids on the Japanese currency. A strong yen cuts Japanese manufacturers’ competitiveness in the global market as well as profits made abroad when converted into local currency.

Automakers underperformed, with Toyota Motor Corp dropping 2.4% and Honda Motor Co down 2.6%.

SoftBank tumbled 7.3% to 9,251 yen to a level not seen since early August. The stock fell on concerns over its ties to Saudi Arabia. Saudi Arabia, which provided much of the funding for the SoftBank Vision Fund, is facing growing pressure from world leaders and businesses over the disappearance of a prominent Saudi journalist.

Other exporters also lost ground. Precision equipment maker Olympus Corp dropped 1.7% and air-purifier company Daikin Industries shed 2.3%.

Ono Pharmaceutical dropped 2% after the company said its potential blockbuster cancer drug Opdivo failed in its late-stage trial for lung cancer.

Other top losers in the Nikkei 225 include Okuma (fell 2.92%), Terumo (plunged 3.22%), Takashimaya (fell 4%) and Kirin (fell 4.26%) on Monday.

On the economic front, the Industrial Production change (MoM) for August released on Monday came in at 0.2%. The Production growth was below the expectation of 0.7%. The Industrial Production growth in July was 0.7%.

On the technical front, the RSI is currently at 26.68% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the lower band of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.

 

Trade Suggestion-Limit Sell At 22180, Take Profit At 22030 Stop Loss At 22255

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