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The Nikkei 225 climbed on Friday, recovering from a sharp pullback in the previous session as traders rotated back into large-cap technology stocks. The benchmark index rose 49,386.15 extending the market’s winning streak to eight weeks out of the past nine.
Investor sentiment improved after Sanae Takaichi, the newly elected prime minister of Japan, signalled intentions to pursue fiscal expansion and policies supportive of domestic growth.
Market participants continued to position around the so-called “Takaichi trade”, rotating between AI, defence and industrial plays based on anticipated government spending priorities.
Technical Analysis: Nikkei225
The Nikkei 225 is buoyed by a wave of risk-on sentiment across Asian markets. Traders cheered upbeat corporate earnings and a weaker yen, which helped export-heavy sectors extend their recent rally. The index is now edging closer to the symbolic 50,000 level, a mark that could act as both a psychological and technical barrier in the near term.
From a technical perspective, the uptrend remains firmly intact. The 5-, 10-, and 30-day moving averages continue to slope upward, confirming sustained bullish momentum since the breakout above 45,000 in mid-September.
Price action has consistently respected the 10-day moving average as dynamic support, while the most recent rebound near 48,000 reaffirmed the market’s appetite for higher levels. Immediate resistance lies at 49,500–50,000, while strong support is seen around 47,800–48,000.
The MACD remains in positive territory with a widening spread above the signal line, indicating robust momentum.
The histogram continues to print green bars, reflecting ongoing buying pressure. Unless momentum stalls or the MACD line crosses downward, the current rally could carry further gains.
Market Outlook for the Japanese Stock Market
With policy optimism and robust sector rotation underpinning sentiment, Japanese equities appear well-supported heading into the final quarter. Traders will be watching for any concrete details of Takaichi’s fiscal programme, which could set the tone for further gains in AI, semiconductor, and infrastructure-linked shares.
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