Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

<ul>
<li>Seasonal weakness and failure at highs support a tactical short.</li>
<li>July has historically been weak for the Nikkei in both price and realized vol; Trump-era data showed summer vol was suppressed.</li>
<li>We propose a tactical trade that aligns with the current setup and supportive price and volatility seasonals.</li>
</ul>


Seasonal weakness and failure at highs support a tactical short.
July has historically been weak for the Nikkei in both price and realized vol; Trump-era data showed summer vol was suppressed.
We propose a tactical trade that aligns with the current setup and supportive price and volatility seasonals.


Nikkei: Failed Breakout and Summer Seasonals Signal Opportunity

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

<ul>
<li>Japan PM Ishiba says disagreements remain with US on tariff talk. This is probably the main catalyst that could slow down the current <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> rally.</li>
<li>Our WEEKLY <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a> model signals a mildly overbought status, the index could go higher, but will face harder resistance in 1-2 weeks from now.</li>
<li>We don't see the Nikkei pulling back this week, we think it will close this week up.</li>
</ul>


Japan PM Ishiba says disagreements remain with US on tariff talk. This is probably the main catalyst that could slow down the current Nikkei 225 (NKY INDEX) rally.
Our WEEKLY Nikkei 225 model signals a mildly overbought status, the index could go higher, but will face harder resistance in 1-2 weeks from now.
We don't see the Nikkei pulling back this week, we think it will close this week up.


Nikkei 225 Outlook And Profit Targets Amid Uncertainty Over Japan-US Tariff Negotiations

Derivatives and Quantitative Strategist

Gaudenz Schneider

Event-Driven

<ul>
<li>With Japan’s policy rate at 0.5% and the last hike in January 2025, markets are closely watching the BoJ’s next move on June 17.</li>
<li>Historical data shows limited market impact from anticipated rate decisions—but rare surprises, like the July 2025 hike, have triggered outsized index reactions.</li>
<li>While historical data and current option pricing suggest the June BoJ decision is unlikely to move markets significantly, investors should be aware of low-probability tail risk when positioning.</li>
</ul>


With Japan’s policy rate at 0.5% and the last hike in January 2025, markets are closely watching the BoJ’s next move on June 17.
Historical data shows limited market impact from anticipated rate decisions—but rare surprises, like the July 2025 hike, have triggered outsized index reactions.
While historical data and current option pricing suggest the June BoJ decision is unlikely to move markets significantly, investors should be aware of low-probability tail risk when positioning.


Bank of Japan's June Policy Decision: A Non-Event for Markets?

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> is currently rallying after a modest pullback last week.</li>
<li>The index <strong>went above our model resistance level at 38347 (50% prob. of reversal)</strong>. It's modestly overbought and could go higher.</li>
<li>News can perturbate the trajectory of the index but at the moment the Nikkei seems directed towards higher prices: <strong>39216 is our profit target for this rally, before Jun 27th.</strong>
</li>
</ul>


The Nikkei 225 (NKY INDEX) is currently rallying after a modest pullback last week.
The index went above our model resistance level at 38347 (50% prob. of reversal). It's modestly overbought and could go higher.
News can perturbate the trajectory of the index but at the moment the Nikkei seems directed towards higher prices: 39216 is our profit target for this rally, before Jun 27th.



Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks

<ul>
<li>Historic volatility has collapsed on the Nikkei, normalizing at a far quicker pace than the volatility episode last August.</li>
<li>Global uncertainty remains unresolved, casting a shadow over recent equity strength.</li>
<li>This week’s rally came without FX tailwinds, underscoring a potentially fragile move.</li>
</ul>


Historic volatility has collapsed on the Nikkei, normalizing at a far quicker pace than the volatility episode last August.
Global uncertainty remains unresolved, casting a shadow over recent equity strength.
This week’s rally came without FX tailwinds, underscoring a potentially fragile move.


Nikkei Index Options Weekly (May 26 – 30): Back to Pre-Tariff Levels, But Uncertainty Still Looms

Japan

The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The Nikkei Stock Average was first published on May 16, 1949, where the average price was ¥176.21 with a divisor of 225. 

Nikkei 225 (NKY INDEX)

Nikkei: Failed Breakout and Summer Seasonals Signal Opportunity

Tactical short position is recommended in the Nikkei due to historical weakness in July and suppressed summer volatility.

John Ley

Nikkei 225 Outlook And Profit Targets Amid Uncertainty Over Japan-US Tariff Negotiations

Japan PM Ishiba's disagreements with US on tariffs could slow down the Nikkei 225 rally, but our model signals this week should close up with...

Nico Rosti

Bank of Japan's June Policy Decision: A Non-Event for Markets?

Stay ahead of potential tail risks: with the Bank of Japan's crucial rate decision just two days away, this analysis reveals why the June 17...

Gaudenz Schneider

Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks

The Nikkei 225 is rallying after a modest pullback last week, surpassing our model Q2 resistance level at 38347. While Sony Corp's spinoff is in...

Nico Rosti

Nikkei Index Options Weekly (May 26 – 30): Back to Pre-Tariff Levels, But Uncertainty Still Looms

Nikkei's historic volatility has quickly normalized, but global uncertainty still looms over recent equity strength, with this week's rally...

John Ley

Nikkei: Failed Breakout and Summer Seasonals Signal Opportunity

Tactical short position is recommended in the Nikkei due to historical weakness in July and suppressed summer volatility.

John Ley

Nikkei 225 Outlook And Profit Targets Amid Uncertainty Over Japan-US Tariff Negotiations

​Japan PM Ishiba's disagreements with US on tariffs could slow down the Nikkei 225 rally, but our model signals this week should close up with...

Nico Rosti

Bank of Japan's June Policy Decision: A Non-Event for Markets?

Stay ahead of potential tail risks: with the Bank of Japan's crucial rate decision just two days away, this analysis reveals why the June 17...

Gaudenz Schneider

Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks

​The Nikkei 225 is rallying after a modest pullback last week, surpassing our model Q2 resistance level at 38347. While Sony Corp's spinoff is in...

Nico Rosti

Nikkei Index Options Weekly (May 26 – 30): Back to Pre-Tariff Levels, But Uncertainty Still Looms

​Nikkei's historic volatility has quickly normalized, but global uncertainty still looms over recent equity strength, with this week's rally...

John Ley

Japan PM Ishiba's disagreements with US on tariffs could slow down the Nikkei 225 rally, but our model signals this week should close up with...

The Nikkei 225 is rallying after a modest pullback last week, surpassing our model Q2 resistance level at 38347. While Sony Corp's spinoff is in...

Nikkei's historic volatility has quickly normalized, but global uncertainty still looms over recent equity strength, with this week's rally...