Nikkei 225 drops 5% on strong yen, dragging FTSE 100 and NASDAQ 100 down
Nikkei 225 begins week 5% down
The Nikkei 225 dropped by 5% on Monday morning on the back of a strong Japanese yen following the results of the ruling Liberal Democratic Party election last Friday. Former defence minister Shigeru Ishiba, who is seen as less dovish than his rival Sanae Takaichi, won the leadership of Japan’s ruling party, effectively making him the next prime minister.
The 200-day simple moving average (SMA) at 38,595 now acts as resistance with the August-to-September uptrend line at 37,410 acting as potential support. Slightly below it lie last week’s low and the 55-day SMA at 37,265-to-37,093.
FTSE 100 remains side-lined
The FTSE 100 continues to range trade above its 55-day SMA at 8,256 but below Friday’s high at 8,336. Above it lies last week’s high at 8,372.
Support below Friday’s low at 8,271 sits at the 20 September 8,196 low. A fall through 8,196 low would put the early September low at 8,153 back on the cards.
NASDAQ 100 still range trades around the 20,000 mark
Last week the NASDAQ 100 shot up to a two-month high on positive Micron Technology fourth quarter (Q4) results and as the US economy grew by 3% in the second quarter (Q2). The index has since slightly come off its 20,316 current September high.
Were the 20,316 level to be exceeded, the July record high at 20,760 would be back in sight.
The August 19,938 high may act as minor support. Further support below the 23 September 19,720 low sits at the 19 September 19,605 low and also at its 13 September 19,557 high.