Nikkei Benefits From Japanese 10-Year Policy

The Nikkei 225 is outperforming the S&P 500. The Japanese index’s moving averages are in bullish formation. It’s green 5-day EMA is above is orange 13-day EMA, and its orange 13-day EMA is above its black 34-day EMA. Moreover, the index is above its red 200-day EMA.

It’s interesting to note, that on a relative basis the Japanese 10-year treasury hass risen at a quicker pace than the US 10-year treasury in April. However, the rate is still so low in Japan that it is unlikely to impact corporate Japan as is feared in the US. This is reflected in the BoJ’s ultra-loose policy that includes a negative short-term interest rate of -0.1% and attempts to keep the Japanese 10-year as close to zero as possible.