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    Nikkei wavers ahead of Yellen testimony Omkar Godbole

    Japan’s benchmark equity index trimmed losses, but is having a tough time moving into the positive territory on account of caution ahead of Yellen testimony and Thursday’s Brexit referendum.Nikkei index fell 0.9% in early Asia to 15,770 levels before trimming losses to trade around 15,750 levels. Currently the index is trading largely unchanged on the day.Eyes Yellen testimony and USD/JPYFederal Reserve chief Janet Yellen's two-day testimony before Congress starts later today, in which she may offer clues on the next move in rates. As per CME data, markets do not see Fed moving rates this year. In fact, there is a very low probability (of 3%) of Fed reducing rates by 25 basis points in December.Meanwhile, the demand for safe haven Yen is also guiding the index. The currency strengthened in Asia after Bank of Japan minutes showed the efficacy of QE as a tool to achieve inflation target is under question.Nikkei Technical LevelsThe immediate hurdle is noted at 16,035 (previous day’s high), above which the index could target 16,341 (Feb 14 high). A violation there would expose 16,500 levels. On the other hand, break below 15,855 (hourly 50-MA) would expose support at 15,744 (5-DMA) and 15,500 levels.

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