Summer 2020 Olympics kick off What does it mean for the Nikkei 225 Index
The long-awaited Summer 2020 Olympics began today with opening ceremonies and less than 1000 fans in the stands. The city of Tokyo itself is under a State of Emergency for the next month due to the coronavirus. Of the over 11,000 athletes participating in the summer games, less than half participated in the opening ceremonies. After a year delay due to the pandemic, organizers were hoping for an event full of triumph. Instead, they are dealing with a subdued Games and worried athletes. Nearly 100 athletes have already been sent packing as a result of testing positive or being exposed to the virus.
Holding the Olympic games this year was not a popular decision among the residents of Japan. Many fear that it could only worsen the pandemic, especially with the more contagious Delta variant making its way thought the host country. Corporate sponsors, such as Toyota, Motorola, and Panasonic didn’t send representatives to the games. Toyota even went as far as to pull Olympic-themed commercials in Japan during the games. What if they are right? What will this due to Nikkei if the Olympics turns into a super-spreader in Japan?
Japan’s Nikkei 225 had been moving in an orderly, upward sloping channel (blue) since putting in pandemic lows in March 2020. The stock index peaked on February 16th at 30,724. Since then, the Nikkei has pulled back and broke below the upward sloping channel on May 11th and continues to trend in a corrective channel lower (red). As fears of the coronavirus in Japan, and at the Olympics in particular, the Nikkei 225 sits over 8.5% off its February 16th highs, oscillating around the 200 Day Moving Average near 27,970. Resistance is at the corrective channel trendline near 29,050 ahead of the February highs at 30,724. If prices can make new local highs, resistance is at the top, upward sloping channel of the longer-term channel. First support below the 200 Day Moving Average is at the bottom channel of the corrective channel, near 26,6700. The next support doesn’t come into play until the 38.2% Fibonacci retracement level from the March 2020 lows to the February 16th highs, near 24,757.
Source: Tradingview, FOREX.com
If the delta variant can be contained at the Olympic games and they proceed without any problems, the Nikkei 225 may get a boost as Japanese corporate sponsors advertising bets will have paid off. However, if the virus spreads around Olympic Village and even worse, athletes need to be sent home, Japan’s main stock market index may be in for a bit of trouble.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.
GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2025