On March 4, the stock market experienced a sharp decline due to the impact of military conflict in Iran, with the Nikkei Average closing lower for the third consecutive day. Heightened caution regarding the Middle East situation led to widespread declines across most sectors, resulting in a nearly universal downturn in the market [1]. Key figures include the Nikkei Average at 54,245.54 yen (-2,033.51 yen, -3.61%) as of 15:30, the USD/JPY exchange rate at 157.14 yen (-0.59 yen, -0.38%) as of 18:49, the NY Dow closing at 48,501.27 dollars (-403.51 dollars, -0.83%), and the Shanghai Composite closing at 4,082.47 (-40.20, -0.98%) [1]. Asian stocks also saw broad declines, with Hong Kong stocks continuing their steep drop and the Shanghai Composite showing some resilience due to policy expectations despite ongoing caution [1].
Technical analysis reveals that the Nikkei Average has fallen significantly for three consecutive days, breaking below the 25-day moving average. Although Nikkei 225 futures showed signs of a rebound, closing 1,290 yen higher at 55,540 yen at 19:00, the session ended with a large bearish candle, and the break below the 25-day line is seen by some as the prelude to a market collapse [1]. Option market activity, particularly in the Nikkei 225 options for March, is being closely watched, and some analysts suggest that maintaining the 13-week moving average could signal a rebound opportunity [1].
Looking ahead, several scenarios are anticipated for the next month: continued market declines if the Middle East situation worsens, temporary rebounds driven by policy expectations or intervention concerns, and increased risk of collapse if key technical indicators (such as the 25-day and 13-week moving averages, and RSI) are breached [1]. Market participants warn that the large bearish candle and the break below the 25-day moving average should be viewed as a cautionary signal, necessitating vigilance regarding future developments [1].
Trading advice includes monitoring whether the 13-week moving average can be maintained as a potential rebound trigger, focusing on low PBR stocks with RSI below 20% for possible recovery, and paying attention to option market activity and futures trading volume for short-term trading strategies [1]. While overall market sentiment is pessimistic in the short term, there are movements seeking rebound opportunities amid policy responses and intervention concerns [1].
CONCLUSION
The Iranian military conflict has triggered a sharp sell-off across global markets, with the Nikkei Average and other major indices posting significant losses. Technical signals point to heightened risk, though some analysts see potential for a rebound if key support levels hold. Market sentiment remains cautious, and participants are advised to closely monitor technical indicators and policy developments.