The latest earnings season has provided several positive signals from major Japanese companies. Game developer and publisher Nexon Co., Ltd. reported second-quarter revenue of ¥121.08 billion, up from ¥118.85 billion a year earlier, while earnings per share increased to ¥37.63 from ¥20.92.
Hikari Tsushin Inc. also delivered stronger results in its latest quarter, with revenue rising to ¥192.56 billion from ¥167.17 billion a year earlier and earnings per share increasing to ¥837.15 from ¥641.83. Isetan Mitsukoshi Holdings Ltd. reported revenue of ¥128.91 billion compared with ¥124.19 billion in the corresponding period, while EPS rose to ¥63.80 from ¥51.81.
However, the positive corporate backdrop is being offset by growing pressure from Japan's government bond market. The benchmark 10-year JGB yield climbed as high as 2.945% on August 18, its highest level since September 1996, before easing slightly toward 2.935%. The move reflects persistent inflation concerns and rising expectations that the Bank of Japan could tighten monetary policy again in the coming months.
Longer-dated yields also remain elevated. The 20-year JGB yield is trading around the 3.8% area, while the 30-year yield climbed above 4.10%. Rising yields increase financing costs and can put particular pressure on richly valued growth and technology shares, which helps explain why the Nikkei is struggling to extend its recent rally despite supportive earnings results.
At the time of writing, some of the strongest performers in the Nikkei 225 include Nippon Yusen K.K. (+4.14%), Japan Steel Works (+3.89%), Mitsui O.S.K. Lines (+3.61%), Takeda Pharmaceutical (+3.17%) and Kawasaki Kisen Kaisha (+2.96%).
The largest declines are being recorded by Taiyo Yuden (–11.16%), Murata Manufacturing (–9.52%), Kioxia Holdings (–5.79%), SUMCO Corp. (–5.76%) and SCREEN Holdings (–5.58%). These figures represent an intraday snapshot and may change before the end of the session.
Support and Resistance Levels
On the daily chart, the Nikkei 225 remains within a broader bullish structure but is moving away from recent highs after failing to hold above the upper area of the previous descending channel. The current pullback brings the 67,000.0 support area back into focus.
Technical indicators continue to maintain a moderately bullish signal despite the correction: the faster moving averages of the Alligator indicator remain above the slower line, while the Awesome Oscillator histogram is forming corrective bars. However, the sharp intraday decline suggests that bullish momentum has weakened in the short term.
Resistance levels: 70,150.0, 75,000.0.
Support levels: 67,000.0, 62,080.0.
Nikkei 225 Trading Scenarios and Forecast
Long positions may be considered after a rise and consolidation above 70,150.0, with a target at 75,000.0 and a stop-loss at 69,000.0. Time horizon: seven days or more.
Short positions may be considered after a decline and consolidation below 67,000.0, with a target at 62,080.0 and a stop-loss at 69,000.0.
