Snapshot: The Nikkei 225 closed down almost 1% overnight at 60,816, pressured by escalating Middle East tensions and spillover from Friday’s Wall Street selloff. The absence of fresh domestic catalysts leaves the index vulnerable to risk sentiment in the NY session.
- Watch for a break below 60,500 as an initial signal of further downside.
- Geopolitical risks surrounding Iran remain a key watch item, potentially overshadowing positive US macro sentiment.
Bias into NY: We are biased slightly negative on the Nikkei 225, targeting a potential move towards 60,000, as lingering geopolitical worries and elevated oil prices outweigh the supportive backdrop of a relatively stable VIX and rising US real yields.