JP 225 forecast: the index hits a new all-time high

The JP 225 stock index resumed its upward movement after a correction and reached a new all-time high. The JP 225 forecast for today is positive.

JP 225 forecast: key trading points

• Recent data: Japan’s national core Consumer Price Index came in at 2.9% in September
• Market impact: the effect on the Japanese equity market is moderately negative

JP 225 fundamental analysis

Japan’s annual national core inflation accelerated to 2.9%, confirming that inflation remains above the Bank of Japan’s 2.0% target. For the stock market, this is a two-sided signal. On the one hand, stable prices support revenues in sectors with strong pricing power, such as premium consumer goods and services. On the other hand, they increase the likelihood of a gradual monetary policy normalisation, which could lead to higher JGB yields and an increased discount rate. An additional risk is a stronger yen if market participants raise expectations for tighter monetary policy.

For the JP 225 index, the overall impact is neutral to mildly negative in the short term. Expectations of a more hawkish tone from the Bank of Japan may drive up local rates and yen volatility, often triggering a rotation from export-oriented sectors (automotive, electronics, industrial machinery) to domestically focused and defensive segments. However, if the BoJ maintains a cautious stance and the yen does not strengthen significantly, the report will have a moderate impact.

JP 225 technical analysis

The JP 225 index has reached a new all-time high, although a short-term correction may follow. The global trend remains bullish. The support level is located at 48,425.0, while the resistance at 49,770.0 has been broken.

The following scenarios are considered for the JP 225 price forecast:

• Pessimistic JP 225 scenario: a breakout below the 48,425.0 support level could send the index down to 46,370.0
• Optimistic JP 225 scenario: if the price consolidates above the previously breached resistance level at 49,770.0, the index could climb to 52,720.0

Summary

Inflation in Japan at 2.9% confirms persistent price pressures above the Bank of Japan’s target, increasing the risk of further monetary tightening. Rising government bond yields and potential yen appreciation create a moderately negative short-term backdrop for the JP 225, with likely pressure on exporters and rotation towards defensive sectors. The next upside target for the JP 225 could be 52,720.0.

Open Account