Current trend

The leading Japanese stock index NI 225 is correcting near the level of 32762.0. After the end of the period of global corporate reporting, macroeconomic reports and the situation on the domestic bond market again come to the fore in asset dynamics.

Japan's Gross Domestic Product (GDP) fell by 0.7% in the third quarter, significantly slower than the 0.9% increase in the previous period, and in annual terms the figure was -2.9% after an increase of 3.6%, which was the largest reduction since December 2021. One of the main reasons for the economic slowdown was a decline in Consumer Spending by 0.2% in the third quarter after -0.6% in the previous period. The Household Spending index in October was -0.1%, and the annual rate reached -2.5%. With such indicators, the yen quotes are unlikely to grow and the hope for updating the annual highs in the index will most likely not come true.

In turn, the 10-year bonds were trading at a rate of 0.7860%, up from 0.6494% at the end of last week, while the 20-year bonds yield was 1.5560%, exceeding the 1.3825% recorded last week.

The growth leaders in the index are Tokyo Electric Power Co., Ltd. ( 14.28%), Mitsui Engineering & Shipbuilding Co., Ltd. ( 9.01%), Keisei Electric Railway Co., Ltd. ( 5.06%), Nissui Corp. ( 5.09%).

Among the leaders of the decline are Mitsui Mining and Smelting Co., Ltd. (-1.89%), Sumitomo Chemical Co., Ltd. (-1.12%), Dai-Ichi Life Holdings Inc. (-1.25%).

Support and resistance

On the daily chart, the price is held within the local Expanding Formation pattern with dynamic boundaries of 34020.0–29870.0.

Technical indicators reversed and issued a new sell signal: the AO histogram is forming new corrective bars, and fast EMAs on the Alligator indicator are moving away from the signal line.

Support levels: 32390.0, 31230.0.

Resistance levels: 33140.0, 34020.0.

Trading tips

If the asset reverses and continues local decline and the price consolidates below the support level of 32390.0, short positions can be opened with the target at 31230.0. Stop-loss — 33000.0. Implementation time: 7 days and more.

If the asset continues growing and the price consolidates above the resistance level of 33140.0, long positions will be relevant with target at 34020.0. Stop-loss — 32900.0.