Nikkei tumbles back below 22,000.00 as markets pull back

Nikkei's retracement ends early following FOMC.
Risk aversion pulling down equities across the board.

Joshua Gibson FXStreet

Japan's leading Nikkei 225 Index is sinking as risk aversion takes hold of the Asian markets, testing 21,640.00 as of writing. China picked a bad day to return from holidays, with Chinese institutions back in the markets to face soured risk appetite after taking the first half of the week off to celebrate Chinese New Year.

Increased growth and inflation expectations came out of Wednesday's FOMC Minutes, causing bond yields to spike to recent highs and sending the US Dollar marching up the charts as risk hopes evaporated to end the day's New York session. Equities, commodities, and risk assets are still feeling the sting, with broad markets sliding in Tokyo's Thursday trading session.

Risk aversion continues to plague Japan from two fronts: market fear pulling cash out of equities sending the Nikkei lower, and risk aversion causing traders to pile into the Yen despite constant plying from the Bank of Japan (BOJ) attempting to keep the Yen from going any higher. Recent Yen buying appeared to recede following newly-made threats from the BOJ that market intervention could be accomplished if things don't improve, but even that threat couldn't keep the Yen down for long with inflation fears sending cash dumping into the Yen once again. The Nikkei can expect to continue suffering at the hands of US growth figures, keeping any gains in the index capped as risk appetite sours on a regular basis.

Nikkei Technicals

The Nikkei began declining in late January, and the recent bounce from 20,565.00 looks set to end, with the index turning away from 22,195.00 and looking set to continue lower. Technical resistance is piling up from 22,133.00 and 22,365.00, while chart support is springing up from recent swing lows at 21,330.00 and 20,926.00.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD jumps to 0.7050, fresh one-month top after hot Australian CPI

AUD/USD attracts buyers for the second straight day on Wednesday, rising to a fresh high since September 23 during the Asian session. A hot Australian CPI print reaffirmed bets for an imminent RBA rate hike in November and boosted the Australian Dollar. Meanwhile, the US Dollar pauses after a three-day rally to a near two-week high ahead of the crucial FOMC rate decision, lending additional support to the currency pair.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold sticks to intraday losses below $4,050 as USD retains bullish bias ahead of FOMC

Gold remains offered below $4,050 during Wednesday's early European session, snapping a two-day winning streak ahead of the key central bank event. The US Federal Reserve is scheduled to announce its policy decision later today and is widely expected to keep rates unchanged. Meanwhile, the focus will remain on the accompanying monetary policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference.

Zcash's bullish momentum mounts on steady ETF inflows, retail confidence

Zcash extends steady recovery above $1,300 on Wednesday, approaching a key resistance near $1,373. Grayscale’s ZEC-focused Exchange-Traded Fund sees persistent buying pressure, with six straight days of inflows, including more than $3 million on Tuesday.

BoC expected to raise interest rates to 2.50%

The Bank of Canada is expected to raise its benchmark interest rate by 25 basis points to 2.50% on Wednesday, as persistent inflation concerns put pressure on policymakers to tighten monetary policy despite growing signs of economic weakness. According to a Reuters poll, 19 of 34 economists anticipate a rate hike, which would mark the central bank's first increase since July 2023.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.