Current trend

Japan's leading stock index NI 225 is correcting in an uptrend, trading near the 36223.0 mark, amid Prime Minister Fumio Kishida's decision to resign, as opinion polls show that the government under his leadership has a persistently low approval rating. The official has already announced that he will not run for the ruling Liberal Democratic Party in the early autumn elections. This decision could negatively affect the stock market, as stocks are traditionally highly dependent on political and economic stability. In addition, the situation with the government's "NISA" program to attract investment to the market, promoted by Kishida, is unclear, as the project could be postponed or completely curtailed with the departure of the prime minister.

The bond market continues to experience a correction: the yield on 10-year debt securities fell to 0.847% from 0.908%, and on 20-year bonds to 1.694% from 1.739%, while 12-month bonds rose to 0.214%, adding 6.55% over the day.

In addition, investors today paid attention to the report of electric motor maker Nidec Corp., which showed an increase in revenue to 648.17 billion yen from 593.51 billion yen in the previous quarter, while earnings per share (EPS) amounted to 97.54 yen, exceeding the forecast of 73.17 yen.

The leaders of growth in the index were Sapporo Holdings Ltd. ( 14.32%), Sharp Corp. ( 6.56%), Konica Minolta Inc. ( 5.04%), and Mitsui Chemicals Inc. ( 3.80%).

Mercari Inc. (˗7.68%), Citizen Holdings Co. Ltd. (˗5.74%), Lasertec Corp. (˗2.73%) are among the leaders of the decline.

Support and resistance

On the D1 chart, the price is approaching the support line of the ascending channel with dynamic boundaries of 41000.0–38400.0 for reverse testing.

Technical indicators are preparing to continue weakening the previously received sell signal: the AO histogram is forming new ascending bars, and fast EMAs on the Alligator indicator are approaching the signal line, narrowing the range of fluctuations.

Support levels: 35500.0, 33600.0.

Resistance levels: 36460.0, 38460.0.

Trading tips

If the asset continues to grow and consolidates above the resistance level of 36460.0, buy positions with the target of 38460.0 will be relevant. Stop loss — 36000.0. Implementation period: 7 days or more.

If the asset reverses and continues to decline as well as consolidates below the support level of 35500.0, sell positions with the target of 33600.0 may be opened. Stop loss — 36000.0.