JPY weakness powers Nikkei to highest since December 4

• Japan's benchmark equity index Nikkei is currently trading at the highest level since December 4.
• Investors seem to have taken a heart from the weakness in the yen.

Japanese stocks seem to have picked up a bid, tracking USD/JPY's rise to 1.5-month highs above 112.00.

Nikkei - Japan's benchmark equity index - gapped higher at 22,123 earlier today and is now trading at 22,173, the highest level since Dec. 4.

The market breadth is extremely positive - 212 of 225 stocks that make up the index are currently flashing green with exporter issues leading the way higher. Names like Softbank Group, Yaskawa Electric are up 4 percent.

More importantly, the index is now hovering well above the crucial 200-day moving average (MA) line of 21,886. That average is widely considered a barometer of the long-term trend. As a result, technical buying may emerge later this week if the index closes today above the longer duration average.

That looks likely as the USD/JPY pair closed well above 111.82 (April 5 high) on Friday, establishing a higher low and higher highs pattern. Put simply, the path of least resistance for the anti-risk JPY is likely to the downside.

Nikkei Technical Levels