Nikkei225: Daily Read | 2026-10-31

The Nikkei 225 is attempting to reassert its longer upward trend, but the recovery is not yet fully convincing because the last price of 64,659 remains in the lower half of its one-month range. The last session finished 1.1 percent higher, showing that demand has returned after the pullback, yet price remains below the one month average of 66,228. That tension matters: the structure still reads as a pullback, slipping under the one-month average while the longer trend points up, so the immediate rebound needs further confirmation before it can become a broader advance.

The wider macro backdrop matters only insofar as shifting global risk appetite can quickly influence Japan’s export-heavy index, because its large cyclical and growth-sensitive constituents amplify changes in confidence. The instrument-specific evidence is modestly constructive: performance is roughly 0.4 percent up over the last two weeks, which means recent pressure has not developed into persistent downside acceleration. Even so, trading below 66,228 indicates that the market has not fully repaired the loss of near-term control, leaving the latest strength vulnerable if participation fades.

The nearer round number handles at 65,000 and 64,000 define the immediate contest because they bracket the current price and should reveal whether the latest advance has durable sponsorship. Holding above 64,000 would defend the rebound and keep pressure on 65,000, while sustained acceptance above 65,000 would make a return toward 66,228 more credible. Beyond there, the month swing high at 70,799 stands about 9.5 percent above the current price and marks the point where the pullback thesis would give way to renewed trend expansion. On the downside, a shelf of support at 61,463 sits about 4.9 percent below and matters because it separates an orderly retracement from deeper structural damage. The Three month range of 60,449 to 70,799 reinforces those boundaries, with both extremes carrying more significance than the nearby handles.

The bull path is straightforward: if 64,000 continues to hold, then a sustained move through 65,000 and recovery of 66,228 would show that the pullback is being absorbed rather than extended. If that sequence develops, then a decisive move above 70,799 opens the path toward 71,799 because the prior range ceiling would have been cleared. The bear path begins if 65,000 repeatedly rejects progress and 64,000 fails. If weakness then reaches and loses 61,463, it exposes 60,449 because the principal support shelf would no longer be containing the retreat.

The main risk to the constructive view is a rebound that stalls beneath 66,228 and rolls through 64,000, because that would confirm that near-term supply still controls the tape. A loss of 61,463 would invalidate the orderly-pullback interpretation, while strength above 70,799 would invalidate the cautious stance. Net, the Nikkei 225 retains an upward longer-term bias, but conviction belongs only above the nearby handles and the one month average.

Key levels: support 61,463 (4.9% below), resistance 70,799 (9.5% above), one-month average 66,228, three-month range 60,449 to 70,799.