Trump's Election Boosts US Dollar: Nikkei 225 Reacts to Rising Tariff Concerns

The Nikkei 225 index pared some of its gains due to weak Yen. It hits a high of 40164 at the time of writing and is currently trading around 39352.

Donald Trump's recent election win is boosting the US dollar and impacting the Japanese Yen (JPY). The USD/JPY rate has reached about 154.62, its highest in four months, due to investor optimism about Trump's economic plans. He plans to raise tariffs on imports, especially from China, which could increase prices for consumers. This might raise US inflation, making it harder for the Federal Reserve to meet its 2% inflation target.

The index remains above its short-term moving averages (34 and 55 EMA) and the long-term 200 EMA on the 4-hour chart. Near-term resistance is at 39500; if this level is broken, the index could climb to 39800 40,300/40484/41000. Sustained bullish momentum is expected only if it rises above 42,550.

On the downside, immediate support is located at 39000, with potential drops to 38800/, 38626, or 38,200 if that level is breached. Further weakness is possible below 35,000.

Indicators on the 4-hour chart show a bullish trend with a CCI of 50 and a neutral average directional movement index. Therefore, it's a good strategy to buy on dips around 38200, setting a stop loss at 37800, and targeting a profit at 40,800.