The Nikkei 225 (Dec future) is under pressure tonight. It is down 1.71% at 9,195 and broke through the 50 day moving average. It is testing July support and if 9,200 officially gets taken out it could bleed to the 8/31 low (8,775). 9,200 support is critical for a potential head and shoulders reversal. Japanese stocks really need a strong jolt here to pull it off IMO. NK is still trading in a descending channel. Over the past six months (since April) the Yen is up 15%+ and the Nikkei is down 15%+. So there's a clear inverse relationship. Japan needs a lower Yen. Charts and articles after the jump.
Nikkei hits 7-wk closing low, breaches key support - Reuters
Advantest, Hino, Hitach, Japan Tobacco, Komatsu, NGK, Sharp: Japan Stocks - Bloomberg
Asia Falls on Dismal Earnings, Outlook Concerns - Morningstar
Nikkei 225 Index Dec 2010 Future - 9mo
(courtesy of optionsxpress)
Nikkei 225 Index Dec 2010 Future - 3mo
Nikkei (Dec) Future NKZ vs. Japanese Yen (Dec) Future JYZ