Key Points
- Nikkei 225 fell 869.13 points or 1.45% to 58,920.98, after touching a high of 60,196.98.
- Brent crude held above $100, last cited at $102.45 after a 3.5% jump in the prior session and a further 0.5% rise.
- Wall Street still provided a strong lead, with the S&P 500 up 1%, the Dow up 0.81%, and the Nasdaq up 1.6% to a record close.
Asian equities pushed to fresh highs as traders leaned on a strong start to the US earnings season and another record finish on Wall Street. Japan briefly traded above 60,000 for the first time, South Korea’s Kospi hit a record high, and Taiwan’s main index also touched an all-time peak.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose about 1% to a record before some of that momentum cooled.
That backdrop tells us the market still wants to own growth and technology exposure. Traders have been willing to look through geopolitical tension as long as company earnings keep landing well and oil shocks do not yet look large enough to choke global demand. Futures later turned softer, which fits the idea that markets are still bullish, but less carefree than they looked at the highs.
For the Nikkei 225, that means the rally remains fundamentally supported, but the margin for error is thinner. If oil keeps climbing and starts to pressure margins, transport costs, and inflation expectations more directly, traders may rotate out of the most extended parts of the move.
Wall Street Earnings Are Still Doing The Heavy Lifting
The US lead remained supportive. On Wednesday, the S&P 500 rose 1%, the Dow Jones Industrial Average added 0.81%, and the Nasdaq Composite advanced 1.6% to a record close. After the bell, Tesla also helped sentiment by posting a surprise positive first-quarter free cash flow of $1.44 billion, compared with market expectations for a $1.43 billion deficit. Revenue came in at $22.39 billion, although that still slightly missed forecasts.
The Nikkei has been moving in step with the global AI and semiconductor trade. Taiwan Semiconductor Manufacturing rose 3.2% and Samsung Electronics gained 2.6%, which helped keep chip and AI-linked risk appetite alive across the region.
The cautious read here is that earnings are still winning the short-term argument, but only just. If US results stay strong, dip buyers may keep stepping into Asian equities. If earnings momentum starts to narrow while oil stays firm, the Nikkei could lose one of its main pillars of support.
Technical Analysis
Nikkei 225 is trading near 58,921, pulling back after a strong rally that pushed price toward the 60,100–60,200 resistance zone. The recent move higher from the late-March lows remains intact, but momentum is starting to cool as the index meets overhead supply.
From a technical standpoint, the bias remains cautiously bullish but showing early signs of exhaustion. Price is still holding above the 20-day moving average (56,263), which continues to slope upward and supports the broader recovery structure. However, the 5-day (59,285) has started to roll over, and the 10-day (58,801) is now acting as immediate support, indicating short-term consolidation.
Key levels to watch:
- Support: 58,800 → 56,200 → 54,400
- Resistance: 60,100 → 61,100 → 62,500
The index is currently consolidating just below the 60,100 resistance level, where recent upside attempts have stalled. A clean break above this zone could extend the rally toward 61,100, with further upside potential if bullish momentum resumes.
On the downside, 58,800 is acting as immediate support. A break below this level could trigger a pullback toward the 56,200 area, though this would likely remain corrective as long as the broader higher-low structure holds.
Overall, the Nikkei 225 is holding onto its recovery gains but losing short-term momentum near resistance. The near-term focus is on whether buyers can reclaim 60,100, or if the index pulls back to retest support before attempting another leg higher.
What Traders Should Watch Next
The next move will likely depend on whether earnings or energy wins the macro tug-of-war. If Wall Street keeps posting clean earnings beats and oil steadies rather than surges, the Nikkei can still rebuild toward the 60,000 area and challenge the 60,196.98 high again.
For now, the Nikkei still looks like a market in an uptrend that has run into a real macro speed bump. Traders should watch whether buyers defend the moving average cluster quickly, or whether oil finally forces a more meaningful rethink of how much good news is already priced in.
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Trader Questions
Why did the Nikkei 225 fall after hitting record highs?
The Nikkei 225 dropped 869.13 points or 1.45% to 58,920.98 after briefly reaching 60,196.98. The pullback reflects profit-taking near record levels and growing caution as oil prices above $100 raise inflation concerns.
Are Asian equities still in an uptrend?
Yes, the broader trend remains supported. MSCI’s Asia-Pacific index rose about 1% to a record, while the Nikkei still holds above key moving averages like the MA10 at 58,800.94 and MA20 at 56,263.94.
How are US markets influencing the Nikkei?
Wall Street continues to provide a strong lead. The S&P 500 rose 1%, the Dow gained 0.81%, and the Nasdaq climbed 1.6% to a record close, supporting global risk sentiment and AI-linked stocks.
What role are oil prices playing in the current market?
Brent crude staying above $100, last at $102.45 after a 3.5% surge and an additional 0.5% rise, is lifting inflation expectations. This creates pressure on equities if energy costs begin to impact growth and margins.
What levels should traders watch for the Nikkei 225?
Traders are watching the 58,800–59,285 range, which aligns with the MA10 and MA5. Holding above this zone keeps the uptrend intact, while a break lower could shift focus toward the mid-57,000s and the MA20 at 56,263.94.
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