JP 225 under pressure: weaker US dollar supports stocks, but BoJ may spring a surprise

After reaching a new August high, the JP 225 index is forming a correction while awaiting a trigger for further growth and is trading around 68,405.0.

JP 225 forecast: key takeaways

• Japanese stocks are supported by lower expectations of a Federal Reserve rate hike
• In July, producer prices in Japan rose by 7.2%
• The main domestic risk remains rising inflation and the possibility of a BoJ rate hike

JP 225 fundamental analysis

The JP 225 forecast for today, 13 August 2026, takes into account that quotes are forming a corrective wave after the recent rise and are testing the 68,405.0 level.

Japanese stocks are supported by lower expectations of a Federal Reserve rate hike. Following the moderate July CPI reading in the US, the market reduced the probability of a September Fed rate hike from around 54% to 40%. Softer expectations for US monetary policy improved global risk appetite and supported Japanese equities.

Gains in Asian technology stocks, especially chipmakers, are supporting the Japanese market today. This is particularly important for the JP 225, as large technology and export-oriented companies have a significant influence on the index.

The Japanese currency remains under pressure, improving the price competitiveness of major exporters and supporting their overseas revenue. At the same time, rising import inflation is fuelling expectations of a Bank of Japan rate hike, which is a potentially negative factor for equities, especially if monetary policy tightening proves faster than expected.

In July, producer prices in Japan rose by 7.2%. High raw material and imported component costs increase the likelihood of further BoJ policy tightening, so the market is bolstered by strong corporate conditions while facing the risk of more expensive financing.

The JP 225 forecast remains moderately positive, supported by a strong technology sector, favourable global market sentiment, and lower expectations of a Federal Reserve rate hike. The main domestic risk remains rising inflation and the possibility of a BoJ rate hike, while high energy prices and geopolitical tensions create additional uncertainty.

JP 225 technical analysis

On the H4 chart, the JP 225 index formed a Harami reversal pattern near the upper Bollinger Band and is trading around 68,405.0. Since the price is moving within an ascending channel, it could form a corrective wave as the pattern signal plays out. The first downside target for the pullback is 67,773.0.

At the same time, the JP 225 forecast also considers another scenario, in which the price could continue the uptrend and move towards 69,750.0 without testing the support level.

The JP 225 price forecast outlines the following scenarios:

• Pessimistic JP 225 scenario: a breakout below the 67,730.0 support level could push the price further down towards 57,245.0
• Optimistic JP 225 scenario: a breakout above the 69,750.0 resistance level could boost the index towards 71,265.0

Summary

The JP 225 index is supported by lower expectations of Federal Reserve policy tightening, resilience in the global technology sector, and a weaker yen, which benefits Japanese exporters. At the same time, rising import inflation and high producer price figures increase the likelihood of monetary policy tightening by the Bank of Japan, creating the key domestic risk for the market. JP 225 technical analysis suggests a correction towards the 67,730.0 support level before further growth.

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