Nikkei – losing height on yen strength

Japan’s benchmark index Nikkei surrendering early gains after Japanese Yen posted a modest rebound against the US dollar amid drop in the treasury yields.

At the time of writing, Nikkei was trading 16,531 levels. The index clocked a high of 16,658 before Yen strength started having an effect on the index. Moreover, USD/JPY pair clocked a high of 106.32 at Tokyo open, which ensured Nikkei strength in early trading.

Shares in Softbank Corp. were down 11.22%. The telecommunications giant SoftBank announced $31bn acquisition of UK chip designer ARM on Monday. Car maker shares and exporters traded lower as well on account of Yen strength.

Meanwhile, names like Dainippon Screen Mfg., Tokyo electron, Konami Corp. dominated the winner’s list.

Nikkei Technical Levels

The immediate support is seen at 15,000, under which the index could drop to 16,432 (100-DMA). A violation there could yield 16,322 (June 5 low). On the other hand, breach of resistance at 16,658 (daily high) would expose 16,830 (July 6 high). A violation there could yield 17,000 levels.