Snapshot: The Nikkei 225 closed up 0.28% at 71,250, completing an impressive 8% weekly run as Japan’s core inflation held steady at 1.4% in May. This in-line domestic print takes immediate hawkish pressure off the Bank of Japan, validating the ultra-gradual normalization narrative seen in yesterday’s April minutes and Deputy Governor Himino’s semiannual report.
- The index remains structurally bid above the 71,000 level, anchored by domestic price stability that keeps local financial conditions loose, though the broader Topix fell 0.57% to 4,045 on financial sector profit-taking.
- Rising US yields, with the US 10-year pushing to 4.49% and the 2-year at 4.20%, combined with a spike in the VIX to 18.44, present a cross-current for global equities during the NY session.
Bias into NY: Tactically bullish Nikkei 225 above 71,000, targeting 71,600, as Japan’s stable domestic inflation backdrop supports high-beta tech, though rising US TIPS real yields at 2.23% may cap overall upside velocity.