Nikkei 225 comes off all-time high as USD/JPY resumes ascent, silver hits new record
Technical analysis of the Nikkei 225 as it comes off last week’s all-time high while USD/JPY resumes its ascent and the silver price hits a new record.
Macro update
Sell-America theme resurfaces:
Global equities weakened and the United States (US) dollar softened after President Trump threatened new tariffs on Europe over Greenland, reviving concerns about renewed trade disruption and policy unpredictability.
Futures and yields react:
S&P 500 and Nasdaq 100 futures fell more than 1%, while the 10-year US Treasury yield climbed to around 4.27%, a four-month high, signalling pressure across both risk assets and bonds.
Europe under pressure:
European equity futures pointed lower after the STOXX 600 dropped 1.2%, with Citi downgrading European equities to neutral amid heightened tariff uncertainty.
Asia mixed, Japan yields spike:
Asian equities edged lower overall, while a weak 20-year JGB auction pushed Japanese bond yields to record highs, reflecting concerns over fiscal loosening ahead of February’s election.
Currencies and havens:
The dollar index slipped for a second session, the Swiss franc strengthened, and gold surged above $4700 an ounce to a new record as investors sought safe havens.
Political risk in focus:
Attention is turning to Davos and an emergency EU leaders’ meeting later this week, with investors questioning the durability and credibility of future US-Europe trade agreements.
Nikkei 225 comes off record high
The Nikkei 225 is sliding towards its November and 6 January highs at 52,637 - 52,524 amid general risk-off sentiment. Further potential support is seen along the December-to-January uptrend line at 52,280.
Minor resistance may now be spotted around the 16 January high at 54,130 and more significant resistance at last week's record 54,487 high, made marginally below the psychological 55,000 mark.
Short-term outlook:
Toppish while below the 14 January peak at 54,487.
Medium-term outlook:
Bullish while above the 48,235 mid-November low.
Nikkei 225 daily candlestick chart
USD/JPY resumes ascent
Last week USD/JPY rallied to levels last traded in July 2024 on snap election speculation with the cross rallying to ¥159.45, close to the psychological ¥160.00 region. Around it, the Bank of Japan (BoJ) has tended to intervene in previous years.
Provided that Monday's ¥157.43 low underpins, the uptrend is deemed to have resumed with the ¥160 area remaining in focus.
Minor support below ¥157.43 lies around the 5 January high at ¥157.30 and at the late December ¥156.99 high.
Short-term outlook:
Bullish while above the 19 January low at ¥157.43.
Medium-term outlook:
Bullish while above the 5 December low at ¥154.35.
USD/JPY daily candlestick chart
Silver trades in record highs
The silver price has so far risen to a new record high at $94.6794 on its way to the psychological $100 mark amid heightened geopolitical tensions.
Minor support may be found around Thursday's $93.5141 low ahead of the December $84.0301 then record high.
Immediate support may be spotted along the accelerated support line at $93.3009.
Short-term outlook:
Bullish while above the 15 January low at $86.4272.
Medium-term outlook:
Bullish while above the 31 December low at $70.0750.
Silver daily candlestick chart
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Connect with us
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Professional clients trading spread bets and CFDs can lose more than they deposit.
The value of shares, ETFs and other ETPs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Some ETPs carry additional risks depending on how they’re structured, investors should ensure they familiarise themselves with the differences before investing.
Share dealing and IG Smart Portfolio accounts provided by IG Trading and Investments Ltd, CFD accounts and US options and futures accounts are provided by IG Markets Ltd, spread betting provided by IG Index Ltd.
IG is a trading name of IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764), IG Markets Ltd (a company registered in England and Wales under number 04008957) and IG Index Ltd (a company registered in England and Wales under number 01190902). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Trading and Investments Ltd (Register Number 944492) and IG Index Ltd (Register number 114059) are authorised and regulated by the Financial Conduct Authority.
The information on this site isn’t directed at residents of the United States, Belgium or any particular country outside the UK and isn’t intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
