Key Points
- Nikkei 225 rose 0.88% to 49,386.15, marking an eighth weekly gain in nine.
- Tech heavyweights SoftBank Group (+3.61%), Advantest (+3.8%), and Tokyo Electron (+2.35%) led the rebound.
- Traders priced in fiscal stimulus expectations from the new government.
Japan’s Nikkei 225 climbed on Friday, recovering from a sharp pullback in the previous session as traders rotated back into large-cap technology stocks. The benchmark index rose 0.88% to 49,386.15, while the Topix gained 0.66% to 3,275.37, extending the market’s winning streak to eight weeks out of the past nine.
Investor sentiment improved after Sanae Takaichi, Japan’s newly elected prime minister, signalled intentions to pursue fiscal expansion and policies supportive of domestic growth.
Market participants continued to position around the so-called “Takaichi trade”, rotating between AI, defence, and industrial plays based on anticipated government spending priorities.
Technical Analysis
The Nikkei 225 surged 0.88% to close at 49,386.15, buoyed by a wave of risk-on sentiment across Asian markets. Traders cheered upbeat corporate earnings and a weaker yen, which helped export-heavy sectors extend their recent rally.
The index is now edging closer to the symbolic 50,000 level, a mark that could act as both a psychological and technical barrier in the near term.
From a technical perspective, the uptrend remains firmly intact. The 5-, 10-, and 30-day moving averages continue to slope upward, confirming sustained bullish momentum since the breakout above 45,000 in mid-September.
Price action has consistently respected the 10-day moving average as dynamic support, while the most recent rebound near 48,000 reaffirmed the market’s appetite for higher levels. Immediate resistance lies at 49,500–50,000, while strong support is seen around 47,800–48,000.
The MACD remains in positive territory with a widening spread above the signal line, indicating robust momentum.
The histogram continues to print green bars, reflecting ongoing buying pressure. Unless momentum stalls or the MACD line crosses downward, the current rally could carry further gains.
Outlook
With policy optimism and robust sector rotation underpinning sentiment, Japanese equities appear well-supported heading into the final quarter.
Traders will be watching for any concrete details of Takaichi’s fiscal programme, which could set the tone for further gains in AI, semiconductor, and infrastructure-linked shares.
