Nikkei 225 index holds near key resistance as tariff tensions test investor confidence
Nikkei 225 trades near resistance as traders assess U.S. tariffs and bullish chart structure
The Nikkei 225 rose for a second straight session on Wednesday, climbing 0.33% to close at 39,821 as traders assessed rising trade tensions and U.S. tariff announcements. Despite a looming 25% import duty on Japanese goods set to take effect August 1, investors remained cautiously optimistic.
Highlights
- Nikkei 225 rose 0.33% to 39,821 despite tariff risks; TOPIX Index gained 0.41% to 2,828
- U.S. to impose 25% tariff on Japanese goods from August 1, with no delay expected
- Technical structure remains bullish, with resistance at 40,800 and support at 39,250
Gains in major stocks such as Sanrio (+2.5%), Toyota Motor (+0.9%), and SoftBank Group (+0.8%) helped buoy sentiment.
Tariff pressures build as Japan braces for August deadline
The broader TOPIX Index also added 0.41% to finish at 2,828. U.S. President Donald Trump confirmed that there would be no extensions to the planned tariff hikes, which target 14 countries, including Japan. In addition to the 25% levy on Japanese exports, Trump unveiled a 50% tariff on copper and hinted at tariffs of up to 200% on pharmaceutical imports. Japanese Prime Minister Shigeru Ishiba responded to the announcement by calling it “truly regrettable,” though he emphasized that Tokyo will continue to seek a diplomatic resolution.
Nikkei 225 index forecast (Source: TradingView)
Despite the geopolitical strain, the Nikkei 225 remains structurally bullish on the charts. The index is consolidating just below a major resistance zone between 40,000 and 40,800, levels that have repeatedly capped upside moves since March. The current support rests at 39,250, with additional demand seen at 38,478 if the short-term trend weakens. Technical momentum remains intact, with the price continuing to respect a rising channel from the April low near 32,000.
Index eyes breakout as bullish momentum holds above 39,000
On the intraday charts, the Nikkei is supported by all key exponential moving averages. The 20 EMA currently sits at 39,625, offering immediate support. Although Bollinger Bands are narrowing after recent gains, the current structure still favors buyers. A breakout above 40,800 could set up an extension toward the 41,300 level, which aligns with the projected upper boundary of the rising channel. A breakdown below 39,000, however, would signal a potential shift in sentiment.
In previous Nikkei analysis, we flagged the 40,000–40,800 range as a magnet for price action, noting the index’s difficulty in sustaining rallies beyond this zone. The latest retest further validates that assessment, while the structural support at 39,000 remains key for near-term trend confirmation.
