Japan’s Nikkei index experienced its biggest one-day plunge in decades, plummeting 12.4% last Monday.

Despite this sharp decline, the index demonstrated a remarkable recovery today, regaining most of its previous losses.

The Nikkei jumped 6.25% to close at 35548, after opening at 33564 and hitting a low of 33380.

Following the completion of the ABC correction in the JPN225, bottoming out at 30751.9, the index has embarked on a new impulse wave.

This bullish reversal, underpinned by strong buying pressure, indicates the prospect of additional gains in the near term.

Weekly Nikkei Analysis

The nikkei index appears to have completed a large impulse wave that began in January 1, 2023.

This impulse wave consists of five sub-waves (1, 2, 3, 4, 5).

After the major impulse wave (I), the JPN225 seems to have also completed a corrective wave (II) consisting of three parts (a, b, c).

Currently, the nikkei index appears to be starting a new impulse wave (III).

If the nikkei index continues to rise according to the Elliott Wave pattern, it is expected to reach higher price targets.