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Key takeaways

Nikkei 225 is leading global equity performance in early 2026, rising 7.9% YTD and outperforming major US indices, supported by improving domestic macro conditions and resilience despite concerns over rising JGB yields.

Fundamentals remain a key tailwind, with Japan’s Citigroup Earnings Revision Index hitting a one-year high, signaling improving corporate earnings expectations versus the US and Europe, alongside potential political support from a snap election that could reinforce pro-stimulus policies.

Short-term technicals favour further upside, with bullish acceleration intact above the 53,370 key support; holding this level opens the door to resistance targets in the 54,565–55,623 range, while a break below would signal a near-term corrective pullback.

In our 2026 long-term global stock market outlook, published on December 26, 2025, we selected the Japanese stock market to outperform due to its improving macroeconomic factors and positive technical indicators.

Read more: 2026 Stock Indices Outlook: Dow Jones, Nikkei 225, Hang Seng poised to outperform

In this report, we will shift our focus to a shorter-term trading horizon, focusing on a one- to three-day period to project the likely trajectory of the Nikkei 225.

The narrative so far… Bullish, going against the fears of rising JGB yields

Fig. 1: Year-to-date global stock market indices as of 14 Jan 2026 (Source: MacroMicro)

The Nikkei 225 has continued to trade in a bullish trend since the start of the new year. The Japanese benchmark stock index rallied by 7.9% in local currency terms (ranked 2nd, see Fig. 1), just behind the 2025 red-hot, South Korea’s KOSPI that continues to extend its gains into 2026 with a positive return of 12.1% (see Fig. 1).

The Nikkei 225 has also outperformed the US stock market: small-cap Russell 2000 (6.8%), Dow Jones Industrial Average (2.3%), S&P 500 (+1.1%), and Nasdaq 100 (0.9%).

On top of the potential near-term positive feedback loop out from the internal political factor, where there is now growing chatter in the marketplace that Japanese Prime Minister Takaichi is likely to dissolve the lower house in parliament as soon as January 23 and call for a snap election soon, either on February 8 or February 15.

A snap election would likely aim to capitalize on high approval ratings of about 70% for Takaichi and could strengthen the Liberal Democratic Party’s grip on power in the more powerful lower house in Japan’s parliament. Hence, if successful as it is intended, Takaichi can have a firmer mandate to pursue pro-stimulus policies that are likely to boost economic growth prospects in Japan.

It’s all about earnings growth prospects

Fig. 2: Citigroup Earnings Revision Index (Japan, US, Europe, UK) as of 2 Jan 2026 (Source: MacroMicro)

Japan Inc’s earnings growth prospects have continued to lead the pack. Citigroup Earnings Revision Index for Japan has continued to trend upwards in the first week of 2026, where it rose to 0.43, a new one-year high as of 2 January 2026, surpassing the US (-0.08), Europe (-0.09), and the UK (-0.14) (see Fig. 2).

The Citi Earnings Revision Index is calculated as “Proportion of Companies with EPS Upgrades (%)” − “Proportion of Companies with EPS Downgrades (%)” (compared to last week). When the index is above the zero axis, it means that analysts on average, are optimistic about the outlook for corporate earnings, and vice versa, it means that analysts are relatively pessimistic.

Let us now focus on the short-term technicals on the Japan 225 CFD index (a proxy of the Nikkei 225 futures).

53,370 key short-term support to maintain bullish acceleration

Fig. 3: Japan 225 CFD index minor trend as of 15 Jan 2026 (Source: TradingView)

Since the 8 January 2026 low of 51,055, the price actions of the Japan 225 CFD index have transitioned into a potential acceleration phase within its latest minor uptrend phase that kickstarted on 18 December 2025.

Watch the 53,370 key short-term support to maintain the current near-term bullish state for the next intermediate resistances to come in at 54,565, 54,910/55,050, and 55,530/55,623 (Fibonacci extension clusters) next (see Fig. 3).

In addition, the hourly RSI momentum indicator has continued to hold above a parallel ascending support that suggests potentially short-term bullish momentum remains intact for the Japan CFD index.

On the flip side, failure to hold at 53,370 with an hourly close below it is likely to invalidate the bullish acceleration scenario to open up scope for a minor corrective decline sequence to expose the next intermediate supports at 52,830/53,644 and 52,060.

As the XNG/USD chart indicates, natural gas prices are trading very close today to the 2025 low formed in August.

The factors weighing on natural gas prices include:

→ Updated weather models, which are forecasting higher temperatures in the eastern US in late January (24–28), sharply reducing expected demand for gas used for heating.

→ Technical issues with power supply and pipelines at the Cheniere Corpus Christi and Freeport LNG terminals, which have reduced gas flows for export. This means gas that was destined for overseas markets is remaining on the domestic market, adding to inventories.

→ Supply–demand imbalance. US gas production is near record levels (110.7 billion cubic feet per day), while domestic consumption has fallen by 15.5% year-on-year.

Technical Analysis of the XNG/USD Chart

In our earlier analysis of gas prices, we identified a long-term descending channel, shown in red on the chart. On 19 December, we:

→ noted that the price was trading near the channel’s median, where supply and demand typically balance;

→ suggested that the market could enter a consolidation phase.

Indeed, prices hovered around the median until 30–31 December, when a sharp decline began. During this move:

→ bearish gaps formed on the XNG/USD chart, indicating a strong dominance of sellers;

→ based on the price action, a downward trajectory can now be drawn (shown by the orange lines).

Traders should be prepared for the possibility that, in the near term, bears may attempt to break below the 2025 low. In that case, it cannot be ruled out that:

→ this would have a psychological impact on the market;

→ sellers would take profit on short positions;

→ buyers could step in and push gas prices up towards the R2 resistance line.

Start trading commodity CFDs with tight spreads (additional fees may apply). Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Daily Pivots: (S1) 1.1633; (P) 1.1648; (R1) 1.1659; More….

Intraday bias in EUR/USD remains neutral as range trading continues. On the downside, below 1.1617 will resume the fall from 1.1807, and target 1.1467 support. On the upside, above 1.1698 will bring stronger rebound to 1.1807. Overall, price actions from 1.1917 are seen as a corrective pattern that might extend further.

In the bigger picture, as long as 55 W EMA (now at 1.1416) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 157.87; (P) 158.66; (R1) 159.23; More...

USD/JPY is extending consolidations below 159.44 and intraday bias stays neutral. Deeper retreat could be seen but downside should be contained above 156.10 support to bring another rally. On the upside, above 159.44 will resume larger rise from 139.87. Next target is 200% projection of 142.66 to 150.90 from 145.47 at 161.95, which is close to 161.94 high.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 154.38 support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Daily Pivots: (S1) 1.3423; (P) 1.3443; (R1) 1.3467; More...

GBP/USD is still bounded in range trading and intraday bias stays neutral. On the upside, break of 1.3567 will resume the rally from 1.3008 towards 1.3787 high. On the downside, break of 1.3389 will resume the fall from 1.3567. Sustained break of 55 D EMA (now at 1.3375) will argue that the decline is another falling leg in the corrective pattern from 1.3787. In this case, deeper fall should be seen back to 1.3008 support.

In the bigger picture, price actions from 1.3787 (2025 high) are seen as a correction to the larger up trend from 1.3051 (2022 low). Deeper decline could be seen as the pattern extends, but downside should be contained by 38.2% retracement of 1.0351 to 1.3787 at 1.2474 to bring rebound. Break of 1.3787 for up trend resumption is expected at a later stage.

Daily Pivots: (S1) 0.7980; (P) 0.8004; (R1) 0.8024; More….

Intraday bias in USD/CHF remains mildly on the upside at this point. Rebound from 0.7860 is in progress and would target 0.8123 resistance. On the downside, below 0.7954 support will turn intraday bias neutral again first. Overall, corrective pattern from 0.7828 low is in progress and would extend further.

In the bigger picture, price actions from 0.7828 are seen as a correction. Larger down trend from 1.0342 (2017 high) is in still in progress. Break of 0.7828 will target 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Daily Pivots: (S1) 0.6670; (P) 0.6686; (R1) 0.6699; More...

AUD/USD is still extending consolidations below 0.6765 and intraday bias stays neutral. Further rally is in favor with 0.6659 support intact. On the upside, break of 0.6765 will resume the whole rise from 0.5913 and target 61.8% projection of 0.5913 to 0.6706 from 0.6420 at 0.6910. However, considering bearish divergence condition in 4H MACD, firm break of 0.6659 will confirm short term topping, and bring deeper correction back towards 0.6592 support.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Further rally should be seen to 61.8% retracement of 0.8006 to 0.5913 at 0.7206. This will remain the favored case as long as 0.6420 support holds.

Daily Pivots: (S1) 1.3867; (P) 1.3882; (R1) 1.3899; More...

USD/CAD is extending consolidations below 1.3917 temporary top and intraday bias remains neutral. In case of another dip, downside should be contained by 1.3789 support to bring rebound. Rise from 1.3641 is seen as the third leg of the corrective pattern from 1.3538. Above 1.3917 will target 1.4139 first. Break there will target 100% projection of 1.3538 to 1.4139 from 1.3641 at 1.4242.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen as the pattern extends, and break of 1.3538 will target 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral until there are signs that the correction has completed.

Daily Pivots: (S1) 0.9299; (P) 0.9325; (R1) 0.9341; More....

EURCHF retreated sharply after hitting 0.9347 and intraday bias is turned neutral again. On the upside, break of 0.9347 will resume the rebound from 0.9268 to retest 0.9394 high. However, break of 0.9294 will bring deeper fall through 0.9268 instead.

In the bigger picture, persistent bullish convergence condition in W MACD is a medium term bullish sign. Firm break of 0.9394 resistance should bring sustained trading above 55 W EMA (now at 0.9362). That should indicate medium term bottoming at 0.9178. Further break of 0.9452 resistance will bring stronger medium term rally towards 0.9928 resistance next, even still as a corrective bounce. Nevertheless, rejection by 55 W EMA will retain bearishness for another fall through 0.9178 at a later stage.

Daily Pivots: (S1) 0.8652; (P) 0.8665; (R1) 0.8672; More…

Intraday bias in EUR/GBP stays neutral and more consolidations could be seen above 0.8643. Further decline is expected and decisive break of 0.8631 cluster support (38.2% retracement of 0.8221 to 0.8663 at 0.8618) will pave the way to 61.8% retracement at 0.8466. However, break of 0.8691 resistance will turn bias to the upside, for stronger rebound to 55 D EMA (now at 0.8719) first.

In the bigger picture, rise from 0.8221 medium term bottom (2024 low) is seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8622) should confirm that this corrective bounce has completed. In this case, deeper fall would be seen back to 0.8201/21 key support zone. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.