Correction highly likely as Topix nears 1,823 resistance level

AMID the soaring Japanese equity market, the long-term price pattern of the Topix reveals a major obstacle ahead. With the Bank of Japan being the last few central banks to have any plans to tighten monetary policy, the excess liquidity continues to drive the Japanese equity market higher, and the current bullish momentum appears unrelenting.

Both the Nikkei 225 and Tokyo Stock Price Index (Topix) soared to a new 52-week high with the Nikkei 225 leading the way as it has already surpassed 23 per cent above the 2007 high of 18,300 points while the Topix is only cu…