Market Fundamental Analysis by RoboForex

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JP 225 forecast: index corrects after hitting new all-time high

The JP 225 index is undergoing a correction, although the broader uptrend remains intact. The JP 225 forecast for today is negative.

JP 225 forecast: key trading points

• Recent data: Tokyo core CPI came in at 2.5% year-on-year
• Market impact: the impact on the Japanese equity market is moderately positive

Fundamental analysis

Tokyo’s core Consumer Price Index stood at 2.5% year-on-year, below the consensus forecast of 2.8% and unchanged from the prior month. This shows that inflationary pressure in Japan’s largest metropolitan area remains stable and softer than expected. For equity markets, this reduces the likelihood of accelerated monetary policy normalisation by the Bank of Japan. The case for aggressive tightening has weakened, which supports valuations for assets sensitive to discount rates.

For the JP 225 index, the overall impact is moderately positive. Softer inflation lowers the risk of sharp rises in yields and capital costs. On the currency side, this increases the likelihood of a weaker yen, which improves overseas revenue conversion for exporters and supports their stock performance, creating a positive ripple across the index.

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Sincerely,
The RoboForex Team

Edited 1 hour ago by RBFX Support