The Japan 225 CFD Index (a proxy of the Nikkei 225 futures) has staged the expected bullish move and rallied by 5.5% since our last publication on 6 August, cleared above its prior all-time high of 42,513 printed in July last year, and hit a fresh record high of 43,009 in today’s Asia session led by banking stocks.
Fig. 1: Japan 225 CFD Index minor trend as of 12 Aug 2025 (Source: TradingView)
Fig. 2: JGB yield curves (30-YR/2-YR & 10-YR/2-YR) major trends as of 12 Aug 2025 (Source: TradingView, click to enlarge chart)
Preferred trend bias (1-3 days)
Maintain a bullish bias above a tightened short-term pivotal support at 41,975 for the Japan 225 CFD Index, and a clearance above 43,230 sees the next intermediate resistances coming at 43,560 and 44,050/44,110 (Fibonacci extension cluster levels) (see Fig. 1).
Key elements
- Based on the Elliot Wave Principle, the current short-term bullish impulsive up move sequence from its 1 August 2025 low of 39,749 is advocating a potential wave 3 extension to the upside for the Japan 225 CFD Index.
- The hourly RSI momentum indicator of the Japan 225 CFD Index is still exhibiting a short-term bullish momentum condition as it stays above a parallel ascending trendline support at the 47 level.
- The major bullish breakout (steepening conditions) of the JGB yield curves since June 2022 has a direct correlation with the movements of the Nikkei 225, and the major uptrend phases of the JGB yield curves remain intact so far, in turn, may trigger a positive feedback loop into the Nikkei 225 (see Fig.2).
Alternative trend bias (1 to 3 days)
Failure to hold at the 41,975 key short-term support negates the bullish tone to kickstart a minor corrective decline to expose the next intermediate supports at 41,610 and 41,275.