NIKKEI 225 RISES AS AUTOMAKERS GAIN; GDP OUTPERFORMS
Nikkei 225 futures are currently trading at 21150-higher by 0.59% as compared to the previous closing. The contract closed in the positive territory in the last trading session also.
In the Cash Markets, the Nikkei 225 jumped 1.20% to close at 21,134.42 on Monday. It was its highest closing level since 28th May. The benchmark index rose today as automakers gain after the U.S. has suspended tariffs against Mexico.
Honda Motor Co. jumped 1.53%, Mazda Motor Corp. rose 1.07% and Toyota Motor advanced 1.8% on Monday.
Stocks of companies with high exposure to China such as factory automation machinery firms and construction equipment makers also ended in positive territory on Monday. Komatsu Ltd added 0.041% and Yaskawa Electric surged 4.50%.
Domestic-demand sensitive shares closed higher on Monday. Drugmaker Daiichi Sankyo added 1.03% while Realtor Mitsui Fudosan advanced 0.70%.
On the other hand, Mobile carriers came under pressure after news that the government will require major operators to cut penalty fees when customers cancel their contracts. KDDI Corp. declined 1.6%, while NTT Docomo lost 1%.
Financial stocks in the index fell today after soft U.S. jobs data increased the odds of easier monetary policy from the U.S. Federal Reserve.
The yield on the U.S.10-year Treasury note fell to the lowest level since September 2017 which dragged down Japan’s financial firms that hunt for higher yields.
T&D Holdings declined 0.6%, Sumitomo Mitsui Financial Group lost 0.2%, and Dai-ichi Life Holdings dropped 0.6%.
The broader Topix added 1.34% to close at 1,552.94 on Monday.
On the data front, the final reading of the Japanese GDP for the first quarter was released on Monday. The QoQ rate of change in the GDP was +0.6%. The GDP growth was above the market expectation of 0.5%.
On the technical front, the RSI is currently at 52.66% 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 11% 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 21130 Take Profit At 21240 Stop Loss At 21080