The December contract of Nikkei 225 futures closed at ¥64,400, down ¥580 from the previous day. It opened at ¥64,850, tracking the cash market, and in the afternoon selling and short covering crossed paths. Selling pressure strengthened again just before the close, but the battle around the -1σ level continued.
Nikkei 225 futures for the December contract closed at ¥64,400, down ¥580 from the previous day. The contract opened at ¥64,850 and narrowed its decline to ¥64,940, but failed to enter positive territory. Selling pressure strengthened around the middle of the morning session, sending it down to ¥64,020.
After the initial wave of selling subsided, short covering emerged toward the end of the morning session. The decline narrowed to ¥64,780 during the lunch break, but weakness in South Korea's KOSPI weighed on the market, and selling resumed in the afternoon, with the contract falling again to ¥63,950 toward the end of the session. Short covering emerged just before the close, narrowing the decline to ¥64,400 by the end of trading.
A rebound was anticipated after semiconductor and AI-related stocks were bought back in the previous day's US market, but weakness was also seen in individual stocks, and the contract dipped below the -1σ level at times. The Nikkei-TSE futures ratio held around 16.00x, and market participants reportedly viewed the -1σ level as support on the downside.
The market is expected to continue trading around the -1σ level. Weekly -1σ and the 200-day moving average are being watched as downside support, while a clear break below -1σ could lead to a move into a lower range. Trading by major securities firms stood out in reports on market participants' trading patterns, and rebalancing activity was observed.