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    Recent Elliott Wave analysis indicates that Nikkei Futures (NKD) are on a strong bullish rally, reaching new highs.

    by VT Markets
    /
    Oct 21, 2025

    Related Market Activities

    Related market activities include Germany’s rising tax revenues, which are affecting EUR/GBP, while GBP/JPY is influenced by Japan’s political developments. The AUD/JPY stays above 98.00 due to Takaichi winning a majority. Meanwhile, gold prices are dropping in various markets under current conditions. The Nikkei is on a strong upward trend. After a brief dip from an all-time high, it has resumed its climb. This increase marks a new buying wave that is likely to push the index higher soon. We believe the current market setup signals potential for continued gains. For traders focused on derivatives, the best strategy is to buy during any dips and use pullbacks as entry points to join the trend. Watch the key level of 45,344: as long as Nikkei futures stay above this price, the bullish outlook remains intact. Using call options or bull call spreads can effectively capitalize on this expected rise.

    Persistent Weakness of the Yen

    This rally is strongly backed by the ongoing weakness of the Japanese Yen. Since the Bank of Japan has kept its ultra-loose monetary policy throughout 2024, the USD/JPY exchange rate has surged past 165. This is a multi-decade high that greatly boosts the overseas profits of Japan’s major exporters. This policy divergence from other central banks continues to drive the Nikkei higher. Supporting this positive outlook, corporate profits for Nikkei 225 companies are expected to grow by over 10% this fiscal year. Foreign investment in Japanese stocks has also reached over ¥5 trillion year-to-date, reflecting strong international confidence in the market. This is reminiscent of the surge in foreign buying we saw in late 2023 that triggered the last major upward move. The recent election of Sanae Takaichi as Prime Minister has also been seen positively by the market, reducing political uncertainty. Her government is expected to promote stock market-friendly policies and continue monetary easing. This stable political environment further supports maintaining a long position in the Nikkei. Create your live VT Markets account and start trading now.

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