Nikkei 225: Rallied Above 48,000, Key Levels To Watch Next As New Japanese PM Ignites Bulls

The Nikkei 225 surged 6.5% since September 23, 2025, reaching a new all-time high of 48,668, fueled by optimism over incoming Prime Minister Sanae Takaichi and anticipated expansionary fiscal policies designed to boost wages and corporate profits. This bullish momentum correlates positively with steepening JGB yield curves, maintaining a medium-term bullish bias with potential targets between 50,090 and 51,220.

Analysis

Nikkei 225 hits new record high, rising 6.5% since 23 September 2025 amid optimism over Japan’s incoming Prime Minister, Sanae Takaichi. Expansionary fiscal policy expected, with higher government spending and increased JGB issuance to boost wages and corporate profits. Steepening JGB yield curves continue to correlate positively with the Nikkei 225’s bullish momentum. Medium-term bullish bias remains intact, with key support at 45,930 and potential targets between 50,090 and 51,220. By Kelvin Wong Price actions of the Japan 225 CFD Index (a proxy of the Nikkei 225 futures) have shaped the expected bullish move. All in all, it rallied by 6.5% to hit a fresh intraday all-time high of 48,668 Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders. The Nikkei 225 has surged 6.5% since September 23, 2025, reaching a fresh intraday all-time high of 48,668, driven by significant optimism surrounding incoming Prime Minister Sanae Takaichi. This robust performance indicates strong market conviction in the new political leadership. The bullish momentum is underpinned by expectations of expansionary fiscal policies, including increased government spending and JGB issuance, specifically designed to stimulate wages and corporate profits. A positive correlation between steepening JGB yield curves and the Nikkei's ascent further reinforces this trend. Technically, the index maintains a medium-term bullish bias with key support identified at 45,930, while potential upside targets are projected between 50,090 and 51,220. The overall market sentiment is extremely positive, reflecting a strong bullish tone.

Key Decisions for Investors

• Investors should consider maintaining or initiating long positions in Nikkei 225-linked assets, given the strong bullish momentum and supportive fiscal policy outlook from the incoming administration.
• Monitor the 45,930 support level for conviction, while observing progress towards the 50,090 to 51,220 target range for potential profit-taking or re-evaluation.
• Pay close attention to the specifics of expansionary fiscal policy implementation and the continued correlation with JGB yield curve steepening, as these are critical drivers of the current rally.