Snapshot: The Nikkei 225 closed Friday up 0.28% at 71,250, cementing a stellar 8% weekly gain as May’s core inflation printed steady at 1.4%. This in-line CPI release, paired with cautious policy minutes from the Bank of Japan’s April meeting, suggests the central bank remains in no rush to aggressively tighten, offsetting hawkish US Federal Reserve signals. This domestic stability, bolstered by a pullback in crude oil to $84.65, continues to anchor the Japanese equity bid.
- The Nikkei’s defense of 71,000 is backed by a steady 1.4% CPI and BoJ Deputy Governor Himino’s currency report, which collectively reinforce a patient policy normalization timeline.
- Volatility risk remains key as we head into the New York session, where US 10-year real yields at 2.23% and a 12.37% jump in the VIX to 18.44 could trigger profit-taking ahead of the weekend.
Bias into NY: We remain constructively bullish on the Nikkei 225, targeting a push toward 71,500 into the NY close, as the local inflation backdrop and falling energy costs insulate Japanese tech from rising US yields. Only a severe spike in the VIX or hawkish US 08:30 ET data would threaten this weekly consolidation.