Snapshot: Nikkei 225 closed up 0.38% on Friday at 59,513, but gains were likely capped by a sharp rally in the Yen. Japanese markets are closed for public holidays until May 6th. The rally in Keyence Corp (7.2%) and Tokyo Electron (6.9%) helped lead the index higher.
- Watch for reaction to Yen strength post-holiday; sustained USD/JPY break below 150 could trigger a deeper Nikkei correction.
- Geopolitical tensions surrounding Iran remain a risk; any escalation could spark a flight to safety and weigh on risk assets.
Bias into NY: Cautiously bearish. The stronger yen presents a headwind for Japanese equities as NY traders return to their desks; look for downside pressure to resume once markets digest the impact of the holiday weekend.