Japanese stocks continue breakout form from Friday

  


The Topix index hits a 31-year high

Nikkei


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The run of gains is continuing to today with the Topix breaking to its highest level in 31 years, breaking away from the consolidation range since March – which was when the BOJ pulled support (even if they say they didn’t) on ETF purchases.

The Nikkei is also seeing a strong breakout to its highest since April:

Japan

In terms of the big picture, fundamentally a change in premiership should not bring about material change to the Japanese political landscape but Suga’s short tenure does bring back some volatility to the supposed status quo.

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Looking at Japanese stocks, I’d argue the latest upside break here owes much to a technical run after months of consolidation and while there may be scope for further gains this week, I fear that a sharp retracement beckons once the euphoria ends.



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