Japan 225: History made at 70,000 MACD is flashing a warning?Japan 225 IndexTVC:NI225Kearabilwe-NonyanaHistory was made in Tokyo on 16 June 2026. The Nikkei 225 touched the 70,000 level intraday for the first time since Japan's asset bubble burst back in 1989 thanks to a unique combination of macro tailwinds. News of the preliminary peace accord between the US and Iran announced over the weekend sparked a rally in Asian markets. After gaining 4.99% to close at 69,317 on Monday, the index continued the momentum on Tuesday when it was confirmed that Bank of Japan had raised interest rates by 25 basis points to 1.0% the highest policy rate since 1994. What's remarkable about this scenario is that the expected yen-based selloff never materialized, with the index managing to close higher again by 0.46%. This structural bull market has been supported by foreign investment of around 16 trillion yen since April 2025, an unprecedented AI-driven semiconductor industry featuring companies such as Advantest and Disco Corp, and 14% YOY earnings growth in the Q1 2026 TOPIX constituents. The daily chart, nevertheless, has started delivering a message that merits close consideration. The truth of the matter is that what price behavior is actually indicating is that the market has worked for its trend but is showing signs of exhaustion at its very core. The technical set up of EMAs is still bullish , prices have honored their dynamic support through all the moving averages along the rally, and every time price retreated, a new leg up was forged. Such commitment to trading discipline distinguishes the momentum market from the runaway trend. In much the same vein, the RSI indicator is bullish its level lies above the signal line suggesting that bullish pressure continues to mount and most importantly, it has not crossed the overbought range yet.The ADR is becoming more volatile as ranges are widening, and such volatility shows that traders are highly confident and are not distributing their positions. As far as the technical indicators on the chart are concerned, there is one aspect about the MACD that can be questionable. The MACD line stays above the signal line, thus the bullish setup remains intact, however, the histogram bars start to shrink and turn into red color gradually. That is no sign of a trend reversal but rather signals that the market needs some time to digest the new level of 70,000 that has been broken during the day but is not closed yet. Trade recommendation Direction: Long Entry: 67,000 – 68,000 (retest of breakout zone on post BOJ consolidation) Primary target: 70,000 Secondary target: 72,000 Stop loss: 65,430 Technical scenarios Bullish continuation: The outlook stays positive if the index holds above the 9-day EMA. Sustaining RSI over 60 and reclaiming green MACD momentum after a daily close above 70,000 would confirm structural support, targeting 72,000. Pullback and reload: Post-70,000 profit-taking may cause red MACD histogram bars. A retest of the 67,000–68,000 breakout zone is likely; provided the 20-day EMA holds, this consolidation offers a strategic entry point for traders. BOJ shock unwind: Hawkish BOJ policy could drive the yen past 155, triggering carry trade liquidations. Breaking RSI 50 and the 20-day EMA would expose 63,000 and the 61,800 Fibonacci level, though this remains secondary unless a close below 65,427 occurs.