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• The Nikkei 225 Index fell by 0.81%, and the broader Topix Index lost 0.67%, reaching their lowest levels in a month as investors booked profits in technology stocks and exercised caution before the release of a crucial US inflation report.
• Japanese producer inflation in June rose at the slowest pace in 26 months, while machinery orders experienced a significant decline in May, adding to investor concerns.
• Technology stocks led the decline, with notable losses from Advantest, Tokyo Electron, Renesas Electronics, Keyence, and Lasertec.
• Other major companies, including Sony Group, Mitsubishi Corp, and Eisai Co, also experienced slumps in their stock prices.

The Nikkei Futures experienced a decline below the swing lows on the daily interval, potentially leading to absorption in the market. Core buyers might take the opportunity to add to their long positions around the upper value extreme (DVAH) of the current Year’s developing value area.

In the intraday perspective, the market initially dropped due to selling pressure around yesterday’s upper extreme of the balanced profile. It fell below the swing lows and traded in a balanced behavior as traders adjusted their positions to align with the risk parameters. This resulted in a rotational behavior, with selling occurring around the developing VWAP.

The day’s auction formed a b-shaped volume profile structure, which investors may interpret as a bullish sign for the next session. However, the market might still test the lows to establish core positions. For a bullish scenario, the market would need to trade above the specific value area, while an open inside the value area would be considered a balanced open, leaning towards the extremes.

4 Weeks Ago

Follow the auction process of the intraday session in this video to stay updated on the market dynamics.

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