Japan 225 Slide Intensifies on BoJ September Rate-Hike Bets

The pullback shows up on the H4 chart as more than a routine dip. The advance from late July ran to 69,600 on declining vertical volume before the trendline gave way on rising volume. FXOpen's analysis reads the volume shift as bearish, noting the decline is now "gaining more momentum than the preceding advance."

Price holds around the point of control at 66,130, the heaviest-traded level of the current market profile. The upper boundary sits at 67,470, the lower at 65,215. A decisive move below the lower boundary exposes the 63,015 support zone, the nearest concentration of activity underneath. Should buyers reclaim the profile from below, the 69,600 high becomes the next major resistance.

Momentum readings sit on the bearish side. The RSI plus moving average composite reads 39, 39 and 49. RSI has pushed into oversold territory; the fast average sits below the neutral zone, the slow average around its midpoint. Oversold conditions can produce a bounce, though the volume picture does not support an immediate reversal.

The fundamental backdrop is mixed rather than uniformly bearish. Rate-hike expectations weigh on equities, and weak domestic demand clouds the growth outlook. For FXOpen's analysts, the near-term path hinges on the BoJ's policy decision, incoming inflation data, movements in the yen and changes in JGB yields. The next scheduled check is the 17-18 September policy meeting.