Nikkei 225 Index rallies after solid Japan data: Will it hit ¥60,000?

The Nikkei 225 Index rose and approached its all-time high, mirroring the performance of American indices like the Dow Jones and Nasdaq 100, which jumped by over 0.50% on Wednesday. The index rose to ¥57,610, a few points below the year-to-date high of ¥57,928.

Japan stocks boosted by solid macro data 

The Nikkei 225 Index, which tracks the biggest Japanese companies, continued its rebound and moved close to its all-time high as a series of macro data pointed to a strong economy.

Data released on Thursday showed machine orders staged a strong recovery in December last year. Orders rose by 19.1% on a month-on-month basis, a strong recovery from the 11% dip a month earlier.

These orders jumped by 16.8% from the same month last year, an increase from the 6.4% decline in the previous month. The two numbers were much better than what analysts were expecting, and it is a good thing for top Japanese manufacturers like Hitachi, Kubota, and Komatsu.

Another report released on Wednesday showed that the country’s trade improved substantially in January, with exports soaring by 16.8%. They had soared by 5.1% in November. 

The export growth was mostly driven by the semiconductor industry, which is still firing on all cylinders. Japan is one of the top players in the semiconductor industry, with companies like Tokyo Electron, Advantest, and Disco Corporation being key suppliers to companies like NVIDIA and Intel.

These semiconductor companies were among the top gainers in Japan, mirroring the performance of the Nasdaq 100 Index, which jumped on Wednesday in a sign that the AI jitters were easing. They also jumped after a report showed that OpenAI was close to raising $100 billion.

The other driver for the index is that the Samsung stock price jumped to a record high after a report said that the company was considering selling a new chip to $700, up by 30% from the current model.

The Nikkei 225 Index also rose as the Japanese yen resumed its downward trend. Data shows that the USD/JPY exchange rate rose to 155.18 from this week's low of 152.32.

In addition to semiconductor stocks, the other top gainers were companies like Japan Steel Works, Sumitomo Electric, Mitsui Engineering, Softbank, Trend Micro, Resonac Holdings, and Mizuho Financial.

On the flip side, the top laggards in the index are companies like Toto, Nissan, Sumitomo Dainippon, Nitori Holdings, Dena, and Fujifilm.

Nikkei 225 Index technical analysis 

The daily timeframe chart shows that the Nikkei 225 Index has been in a strong bull run this year and is now hovering near its all-time high of ¥57,893. 

It remains above the key support level at ¥52,508, its highest level in October last year. Also, it has jumped above all moving averages, while the Relative Strength Index (RSI) and the MACD have continued soaring.

Therefore, the most likely Nikkei 225 Index forecast is bullish, with the next key resistance level being at ¥60,000.