Today marks Japan’s first day of trading in the new year. Looking back at 2013, it was quite a year for this island country: Japan earned the distinction of having both the world’s best performing stock market and worst performing major currency. Its benchmark index, the Nikkei 225 surged 57% for the biggest annual return in 40 years in a rally fueled by the Bank of Japan’s extraordinarily expansive monetary policy. This same policy drove the Yen to a 22% loss on the year – its largest decline against the US Dollar since 1979. I’ve updated above the Nikkei chart from my April 2013 blog post. Back in April my intermediate-term newsletter timing model for the Japanese stock market was on a buy signal, but the long-term down-sloping trend line directly overhead had me questioning the longevity of that signal. As you can see, after 23 years the Nikkei has finally broken above that formidable resistance. Once broken, resistance often becomes support – a floor underneath prices.
♦ Please note that my readings will change without notice, so please don’t buy or sell solely based on anything you read in this blog. ♦