Asian equities rally back, Japan's Nikkei 225 back over ¥22,100.00

Asia indexes are on the mend today after falling in Wednesday's risk-off moves, with Japan's Nikkei 225 index back above 22,100.00.

Risk aversion fueled by Italy's political instability peaked yesterday, with equities declining as traders recoiled at the prospect of Italy being forced into government elections all over again, polarizing the voter base into a proxy referendum on Italy's membership within the European Union.

Italy may not be forced into elections after all according to headlines, and risk appetite has recovered from the week's political tensions, and equities in the Asia markets are recovering from recent declines. Australia's ASX index is up 0.45% for today, with Shangai's Composite index climbing over 1.0% on the day, while Hong Kong's Hang Seng index in the green for almost 0.8%, and Japan's leading Nikkei 225 up a sedate 0.40%.

Nikkei 225 levels to watch

The Nikkei index is lifting from the key 22,000.00 level, but the index is still off recent highs, and traders could soon be seeing a replay of the bearish action that took the Nikkei into a low of 20,318.00 in late March. Frequent bouts of risk aversion continues to sap further bullishness, and the 23,000.00 major handle, which constrained prices last December, looks set to hold for now, and a bearish continuation from here to could easily fall to 21,500.00 and hit the 50.0 Fibo retracement level, assuming support from the 200-day SMA at 21,700.00 fails to hold.