Nikkei 225 futures opened with a gap up, recovered the 75-day moving average toward the end of the session, and showed signs of approaching the upper Bollinger Band. The impact of developments in the US-China relationship and the Middle East is also a focus of market attention.
Nikkei 225 futures began trading this week with a gap up and rose to around ¥67,140 through the night session. Against a backdrop of continued holiday trading and strong underlying momentum, the market is testing the upside.
After breaking above the 25-day moving average following the night session on the 18th, futures subsequently softened to ¥64,590. Once selling subsided, however, they broke above the 75-day moving average and at one point exceeded the Bollinger Band's +1σ level.
On a weekly basis, futures rebounded with the 26-week moving average functioning as support. Some market observers said this could prompt short covering after the holiday period.
In the US, oil prices are being closely watched against the backdrop of developments in the Middle East, and WTI settled in the low-$94-per-barrel range. Future US-China summit talks and developments in the Middle East could also affect risk appetite in the market.
The expected range for Nikkei 225 futures is ¥65,500–¥68,500, while attention is also focused on option strike levels.