Hello and welcome to CantosCharts. My name is Eoghan Leahy and I'm a Technical Analyst and Trader with Fat Prophets.

Today we're going to have a look at the Nikkei and see how the intervention by the Bank of Japan in the yen may help drive this market higher.

First off here we have a comparison chart here today of the Nikkei versus the S&P. We can see here how the NIKKEI has been a huge lagger, really not enjoying the same bull run that the wider global indices have seen over the past few weeks.

Moving on here to the weekly cloud we can see the large consolidation that's been taking place as the Nikkei has been range bound crossing above and below the cloud but generating no real bullish signals.

What we can see is now we have a bullish MACD crossover, a bullish parabolic stop and return signal. What we would aim to see now is a drive higher through this cloud with both it and the lagging line crossing which would generate a very long-term bullish signal.

Looking more closely at the daily chart we can see we've already gotten that cross in price. We're waiting for a confirmation from the lagging line and the MACD crossover. We think that the stimulus measures by the Bank of Japan to try and weaken the yen to boost exports could really be the driver here.

If we have a look now of the yen versus the Nikkei we can see how the recent stimulus, this is the large bar here where the Bank of Japan came out and decided to sell yen in an effort to weaken the yen to boost exports in Japan, this managed to drive the price action higher, but this boost was short-lived. We've now seen a lower low on the yen which has really negated the impact of this interventionist measure. However, if we look to the Nikkei, which is the wider index in Japan, we can see that this intervention has now led to a series of higher highs and may have led to a trend reversal.

Pushing on now, if we have a look at the weekly candlestick of the Nikkei we can see how this downtrend has been broken and we have a kind of long-term uptrend provided this recent low holds which gives us large upside targets towards kind of the 12,000 level which would take us back to the 200 week moving average.

On the shorter term timeframe, the Nikkei still has a lot of work to do to get through this 9,500/10,400 resistance zone. But should it do this, there could be significant highs ahead.

If we have a look now at the daily chart we can see the ending wedge here that with the stimulus we managed to see a breakout above this downtrend resistance, we've seen a push back above the 50 day moving average and we're seeing the index now drive higher with the test of the 200 day moving average highly likely.

So what we can see here, which is quite interesting, is the stimulus in the currency market from the Bank of Japan doesn't seem to be weakening the yen, but we are starting to see some buying interest in the Nikkei which suggests that further stimulus could really drive this market higher. So this is definitely one to keep an eye on going forward.

Thank you very much. My name has been Eoghan Leahy. This has been Cantos Charts.