Nikkei strengthens in Whipsaw move, banks fly

BOJ’s decision to keep rates unchanged seems to have cheered banking, insurance and financial stocks in Japan.

The benchmark Nikkei index now trades 189 points or 1.15% higher on the day around 16,680 levels. The index had dipped in a knee jerk reaction as BOJ did not deliver the Bazooka that many were expecting.

However, decision to keep interest rate unchanged at -0.1% helped banking shares rally. Shares in Dai-ichi Life Insurance advanced 8.44%. Other major gainers are Sumitomo Misui Trust, Shinsei Bank, Aozora Bank, Softbank Corp.

Weak Yen following the BOJ announcement is aiding the exporter shares as well.

Nikkei Technical Levels

The immediate resistance is seen at 16,850 (last week’s high), which if breached would open doors for 17,000 (zero figure) and 17,156 (September high). On the lower side, breach of 16,399 (this week’s low) would expose support at 16,000 (zero figure) and 15,921 (July low).