Nikkei clocks 4-1/2 week high

The risk reset and the resulting weakness in the Japanese Yen pushed the Japan’s benchmark equity index Nikkei higher to 1-1/2 week high of 19,519 levels.

The Dollar-Yen pair jumped 70-80 pips to 114.18 levels (highest since Jan 30). Consequently, the Japanese exporter shares on the rise this Monday morning.

Moreover, the broader market sentiment remains in favour of the risky assets, given the drop in the geopolitical risk after Trump backed off from this hawkish stance and agreed to support the One China policy. Furthermore, Trump-Abe meeting did not involve heated talk about the exchange rate as feared by many last week.

The index was last seen trading around 19,485 levels; up 0.55% on the day.

Nikkei Technical Levels

A sustained move above 17,500 would expose 17,592 (Dec 21 high), above which a major hurdle is seen directly at 20,000 (psychological level). On the downside, a break below 19,426 (1-hr 5-MA) could yield a pullback to 19,334 (1-hr 10-MA), under which a major support is seen at 19,180 (1-hr 200-MA).