Key Highlights:

• Nikkei 225 climbed 1.4% intraday to 35,518.96, on track for a 2.2% weekly gain.
• Topix index rose 1.08%, with a 2.35% weekly increase in sight.
• USD/JPY slipped to 142.94 (-0.23%) as U.S.–Japan talks calmed currency fears.

Japanese equities surged on Friday, capping a strong week as a rebound in tech shares and a softer yen helped offset broader trade uncertainties. The Nikkei 225 touched 35,639.13 at its peak before easing slightly to close at 35,534.13—still marking a robust intraday and weekly performance.

Investor sentiment turned positive after President Trump toned down his trade rhetoric, calling the standoff “unsustainable” and signalling a possible shift in stance. While Beijing denied claims that talks with the U.S. had resumed, traders largely shrugged off geopolitical noise and refocused on corporate earnings and chip sector prospects.

💱 Weaker Yen Provides Tailwind for Japanese Stocks

A dip in the Japanese yen also supported the rally, particularly in export-heavy industries. The USD/JPY pair slipped to 142.94, easing from recent highs. Traders welcomed signs of diplomatic coordination between Japan’s Ministry of Finance and the U.S. Treasury—even if official policy changes weren’t announced.

This decline in currency volatility gave markets room to breathe, especially after midweek swings had threatened to derail sentiment.

📊 Technical Outlook: Nikkei Clears Key Resistance

The Nikkei 225 staged a strong rebound after hitting a low of 34,749.13 earlier in the session. Price action broke back above the 30-period moving average, forming a series of bullish candles that now target the 35,650–36,000 zone.

🖼️ Chart: Nikkei pushes higher above short-term MAs, momentum shifts in favour of bulls – via VT Markets app

The MACD remains bullish, with the histogram staying in positive territory and the signal line above the zero line. Short-term moving averages (5, 10, 30) are showing upward alignment, a sign of trend continuation.

Support is firm near 35,200, and a break above 35,650 could accelerate gains toward the 36,000 psychological barrier. While price action shows some consolidation near the highs, the structure suggests this is a pause—not a reversal.

Picture: Nikkei claws back from the dip, reclaiming structure above key moving averages as bulls eye the 36,000 zone, seen on the VT Markets app

🔮 Market Outlook: Momentum Builds Despite Policy Headwinds

Japan’s stock market appears resilient, even in the face of uncertain trade narratives and mixed geopolitical signals. With earnings season in full swing and tech names leading gains, sentiment could stay positive—especially if global risk appetite continues improving.

If the yen remains under control and U.S.–Japan cooperation steadies currency expectations, the Nikkei may have more room to run. The next few sessions will be key in determining whether this momentum carries through or stalls near resistance.

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