NIKKEI225 Stocks Decline on Monday Before the Jackson Hole Symposium
Stocks sink from recent highs as investors pause on AI and central bank policy bets.
The NIKKEI225 opens the European trading session down 0.90% as traders take some profits from last week’s rally. Today’s eventless schedule leaves investors looking at the meeting of central banks at Jackson Hole, Wyoming.
The market will be watching closely for comments from the Fed Chair on monetary policy. The meeting starts on August 22, but Chairman Powell will be giving his speech on Friday ay 10 a.m. ET.
Hopes are for words that will pave the way for a start to interest rate cuts and dovish policy. The market has been waiting for the Fed pivot for months. Reassuring words should support the recent rally.
However, anything deemed as cautious on the Fed’s policy might cause a correction in the market’s recent recovery. In Japan, the BoJ has reassured the market that they won’t hike rates again while the capital markets show instability.
The stronger yen has also given the market confidence that the BoJ won’t act on rates soon. As the rate hike was seen more to protect a weakening yen than for any other reason.
Technical View
The day chart below for the NIKKEI225 shows a bear market undergoing a correction. The recent dive after the BoJ intervention, took the market into bear territory, reaching a recent low of 30,730.
From that dip the market rallied in a major correction. Today’s candle follows a Spinning Top from yesterday. That type of candle usually indicates a change in direction. The market has also reached a major resistance level of 37,599 (red line).
Failure to break that level also indicates a change in direction to lower levels from here. The next support is at 36,675 (green line). Should that level break, the next major support is at 33,837 (black line), which coincides with a resistance level from year-end 2023.
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