Nikkei recovers from 2-1/2 month lows as Yen dropped in overnight trade

Japan’s Nikkei index recovered from the 2-1/2 month low of 18,650 as the upbeat US trade deficit figure released on Tuesday and comments from President Trump pushed the USD/JPY higher to 110.90 levels. 

The index clocked a session high of 18,941.9 earlier today before deflating to 18850 levels. The data released earlier today showed the Japanese services PMI hit the 19-month high in March.

However, the data failed to lift the equities. This is because the USD/JPY pair trimmed early gains to trade around 1110.70 levels. 

Nikkei Technical Levels

A break above 18,989 (100-DMA) would expose 19,115 (Feb 20 low). On the lower side, breach of support at 18,805 (Feb 7 low) could yield a sell-off to 18,650 (Jan 18 low).