JP 225 forecast: the uptrend continues, but a short-term correction is possible
The JP 225 index hit a new all-time high and then entered a correction. The JP 225 forecast for today is negative.
JP 225 forecast: key trading points
- Recent data: Japan’s core inflation rate for July rose by 3.1% year-on-year
- Market impact: market reaction may range from neutral to moderately negative
JP 225 fundamental analysis
Japan’s national core CPI came in at 3.1% year-on-year, compared to a forecast of 3.0% and the previous reading of 3.3%. The indicator shows that inflation remains above the Bank of Japan’s 2.0% target, although it continues to ease from earlier levels. While risks of persistent inflation remain, the pressure is gradually declining.
For the JP 225, this reading may have a mixed effect. On one hand, slower inflation versus the previous month reduces the risk of abrupt monetary tightening and supports risk appetite. On the other hand, a reading above forecast keeps alive the possibility of rate hikes, limiting equity revaluation. Overall, the effect for the JP 225 is neutral to moderately negative in the short term, as expectations for higher rates and bond yields increase.
Japan Core Inflation Rate: https://tradingeconomics.com/japan/core-inflation-rateJP 225 technical analysis
The JP 225 index consolidated above the 43,385.0 level before entering a local correction. The support level is located at 42,515.0, with resistance at 43,910.0. At the moment, there is a chance of a short-term downtrend starting, signalled by a breakout below the support level.
The following scenarios are considered for the JP 225 price forecast:
- Pessimistic JP 225 scenario: a breakout below the 42,515.0 support level could push the index down to 41,805.0
- Optimistic JP 225 scenario: a breakout above the 43,910.0 resistance level could drive the index to 44,975.0
Summary
Inflation in Japan remains above target but continues to show signs of slowing. For the JP 225, this creates a balance between support from steady economic activity and the risk of gradual policy tightening. Financial companies look the most resilient, while REITs, utilities, and major exporters remain the most sensitive to interest rates and currency shifts. The next upside target for the JP 225 is 44,215.0.
Open Account