Global markets are on edge as Donald Trump’s looming tariff announcement sends shockwaves through Asian equities. Japanese stocks are leading the downturn, with the Nikkei 225 under heavy selling pressure as bearish momentum builds.
Tariff Fears Rock Japanese Markets
Asian markets started the week deep in the red as fears of a fresh wave of US tariffs took hold. Donald Trump’s comments over the weekend, hinting at broad-based reciprocal tariffs aimed at countries deemed to have unfair trade relationships with the US, sent investors running for cover. Japan, in particular, bore the brunt of the sell-off, with the benchmark Topix dropping 3.3% and the exporter-heavy Nikkei 225 sliding 3.9%.
Trump singled out Asia during his remarks, claiming the region had treated the US unfairly on trade. With the president set to unveil his tariff plans on April 2, the uncertainty is rattling global sentiment, especially given his framing of the date as a so-called “liberation day” for the US economy. Markets are bracing for the fallout, with Japanese stocks proving particularly vulnerable due to their heavy reliance on exports.
Nikkei 225: Bearish Momentum Building
The Nikkei 225 has had a rough start to the week, dropping over 6% in the past four sessions and breaking below key swing support, hitting levels last seen in September 2024. The broader market structure has been a sideways range since the highs of July 2024 and the spike lows of August 2024, but recent price action suggests the bearish bias is gaining traction.
One major red flag is the 50-day moving average crossing below the 200-day moving average—often dubbed the “death cross.” This technical signal indicates that the medium-term momentum has shifted to the downside. The RSI is also retesting its March lows without showing any divergence, reinforcing the bearish sentiment and suggesting that sellers are still in control.
Interestingly, the lack of volume behind the recent drop does raise some questions. Volume has been steadily declining since March, indicating that while prices are falling, the move lacks the conviction typical of a sustained downtrend. This divergence between price and volume suggests that the sell-off could be running out of steam, leaving the door open for a short-term rebound.
J225 Daily Candle Chart
Past performance is not a reliable indicator of future results
Drilling down to the hourly chart, the Nikkei 225’s downtrend looks increasingly aggressive. The index is tracking the 9 EMA lower, with the gap widening against the 21 EMA—highlighting the accelerating momentum. However, the RSI on this lower timeframe has dipped deep into oversold territory, hinting that a short-term pullback might be on the cards. We could see a retest of the recently broken daily swing support as bargain hunters potentially step in.
J225 Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% 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.
Tariff Fears Rock Japanese Markets
Asian markets started the week deep in the red as fears of a fresh wave of US tariffs took hold. Donald Trump’s comments over the weekend, hinting at broad-based reciprocal tariffs aimed at countries deemed to have unfair trade relationships with the US, sent investors running for cover. Japan, in particular, bore the brunt of the sell-off, with the benchmark Topix dropping 3.3% and the exporter-heavy Nikkei 225 sliding 3.9%.
Trump singled out Asia during his remarks, claiming the region had treated the US unfairly on trade. With the president set to unveil his tariff plans on April 2, the uncertainty is rattling global sentiment, especially given his framing of the date as a so-called “liberation day” for the US economy. Markets are bracing for the fallout, with Japanese stocks proving particularly vulnerable due to their heavy reliance on exports.
Nikkei 225: Bearish Momentum Building
The Nikkei 225 has had a rough start to the week, dropping over 6% in the past four sessions and breaking below key swing support, hitting levels last seen in September 2024. The broader market structure has been a sideways range since the highs of July 2024 and the spike lows of August 2024, but recent price action suggests the bearish bias is gaining traction.
One major red flag is the 50-day moving average crossing below the 200-day moving average—often dubbed the “death cross.” This technical signal indicates that the medium-term momentum has shifted to the downside. The RSI is also retesting its March lows without showing any divergence, reinforcing the bearish sentiment and suggesting that sellers are still in control.
Interestingly, the lack of volume behind the recent drop does raise some questions. Volume has been steadily declining since March, indicating that while prices are falling, the move lacks the conviction typical of a sustained downtrend. This divergence between price and volume suggests that the sell-off could be running out of steam, leaving the door open for a short-term rebound.
J225 Daily Candle Chart
Past performance is not a reliable indicator of future results
Drilling down to the hourly chart, the Nikkei 225’s downtrend looks increasingly aggressive. The index is tracking the 9 EMA lower, with the gap widening against the 21 EMA—highlighting the accelerating momentum. However, the RSI on this lower timeframe has dipped deep into oversold territory, hinting that a short-term pullback might be on the cards. We could see a retest of the recently broken daily swing support as bargain hunters potentially step in.
J225 Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% 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.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.