TOKYO - The Japanese stock market has underperformed and languished against the US since the infamous burst of Japan’s property bubble in early 1990 that led to two decades of sticky deflation.
Even though, the implementation of “Abenomics” in December 2012; a potent mix of expansionary fiscal and monetary policies had led to an accumulated gain of 150% seen in the Nikkei 225 till the end of 2022, it is still 36% below its all-time high level of 38,957 printed in December 1989 before the bursting of the property bubble from its current level of 28,590 at this time of the writing.
Since its 31-year high of 30,835 printed on 14 September 2021, the Japan 225 Index (a proxy for the Nikkei 225 futures) has evolved into a consolidation “Symmetrical Triangle” range configuration for 18 months within a long-term secular uptrend in place since 10 March 2009 low of 6,945.
The upper (resistance) and lower (support) boundaries of the “Symmetrical Triangle” is at 28,665 and 25,630 respectively.
The monthly RSI oscillator has staged an impending bullish breakout from its corresponding descending resistance which indicates a revival of long-term upside momentum that may translate to a potential bullish breakout of the “Symmetrical Triangle” range configuration of the Index.
However, a break with a weekly close below 24,190 long-term pivotal support invalidates the bullish tone for a decline towards the next support at 20,700. ...continue reading
