NIKKEI 225 INCHES DOWN AS INVESTORS AWAIT FED AND BOJ MEETING

Nikkei 225 futures are currently trading at 21135-higher by 0.28% as compared to the previous closing. The contract, however, closed in the negative territory in the last trading session.

In the Cash Markets, the Nikkei 225 declined 0.72% to close at 20,972.71 on Tuesday. It was its lowest closing level since 7th June. The benchmark index dropped today as traders stayed on the sidelines ahead of a U.S. Federal Reserve policy decision on Wednesday.

Expectations that the U.S. central bank will start cutting interest rates has helped global markets recover from heavy selling stoked by increasing global trade tensions.

Stocks of insurers fell on expectations for lower rates. Dai-ichi Life Insurance slipped 1.29% and T&D Holdings dropped 1.14%.

Stocks of index heavyweights also underperformed today. Fast Retailing dropped 0.93%, Fanuc Corp slipped 0.88% while SoftBank Group plunged 3.31%.

Companies with high exposure to China such as factory automation machinery firms and construction equipment makers also ended in negative territory on Tuesday. Komatsu Ltd fell 1.01% and Yaskawa Electric lost 0.15%.

Stocks of exporters were traded mixed on Tuesday. Tokyo Electron slipped 1% and Sony Corp. edged down 0.2%.

Automakers were also traded mixed today. Honda Motor Co. slipped 0.32% and Toyota Motor Corp. dropped 0.12% while Mazda Motor advanced 0.54% on Tuesday.

The broader Topix lost 0.72% to close at 1,528.67 on Tuesday.

The Bank of Japan’s interest rate decision is scheduled to be released on Thursday. No change in policy is expected and Interest rates are expected to hold at -0.10%.

On the technical front, the RSI is currently at 52.05% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 68% and suggests that the market can move in the upward direction.

Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.

 

Trade Suggestion- Limit Buy At 21115 Take Profit At 21230 Stop Loss At 21070

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