UNEMPLOYMENT & YEN POWERS NIKKEI 225 TO 27-YEAR HIGH

Nikkei 225 rose 1.4% to close at 24,120.04 on Friday. During the intraday trade, the Nikkei 225 touched 24286.10, the highest level since November 1991. For the week, the Nikkei 225 added 1%. For the month, the benchmark advanced 5.5%, its biggest monthly gain since October 2017.

The benchmark index rose on Friday supported by the prospect of a weaker yen and a strong U.S. economy boosting exporters’ profits. In addition, a rise in U.S. bond yields lifted stocks of Japanese Financial firms which invest in U.S. bonds on Friday.

The Topix index gained about 1% to close at 1,817.2.

The dollar was traded above 113.67 Yen on Friday. This represents a nine-month high for the currency pair. A weaker JPY raised hopes of brighter earnings for Japanese exporters. The weaker yen boosts the value of exporter profits made abroad when repatriated (in the local currency).

Exporters which gained on Friday were Nintendo Co. (soared 1.5%), Subaru Corp (surged 2.3%) and Kyocera Corp (advanced 1.8%).

Other top Gainers include shippers after the baltic dry index for freight charges, rose 1.4% overnight. Mitsui OSK Lines surged 1.4% and Kawasaki Kisen soared 1.8%.

Economic data released earlier on Friday reported that the Japanese unemployment rate fell 0.1% in August as compared to the previous month. Unemployment rate for August was 2.4% with the rate being 2.5% in July.

On the technical front, the RSI is currently at 74.27% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands and is heading upwards.

Overall Bias is Positive and Short-term trades can be initiated with tight Stop Loss and Take Profit targets. This trade can remain valid until Monday.

 

Trade Suggestion-Limit Buy At 24050, Take Profit At 24250 Stop Loss At 23950

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