Despite recent bullish attempts, Japanese stocks are still on a bearish trajectory due to US economic recession threat and yen carry trades unwinding.
Yen's appreciation creates downward pressure on Japanese stocks as a result of expectations for narrowing US-Japan interest rate differentials and Fed rate cuts.
Although June's real wage increase boosted consumer confidence and stock prices, sustained yen strength remains a significant negative factor for the NKY225.
High volatility in the NKY225 VIX, currently at 50%, limits trading decisions due to unpredictable swings unrelated to significant news.
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