Nikkei 225 Plummets on Rising Rate Hike Odds

The Nikkei 225 Index has been under pressure lately, plummeting to a low of 65,325 after investors boosted the odds of Bank of Japan rate hikes. Recent macro data revealed that Japan's industrial production rose 3.6% YoY and retail sales increased by 4%, both exceeding expectations.

These numbers indicate a robust Japanese economy, which supports earnings growth. However, the market is already pricing in potential interest rate hikes from the Bank of Japan. If macro prints remain strong and purchasing managers' indices (PMIs) don't decline significantly, the setup could be for a rebound.

The technicals are weak, with the index testing support levels around 64,653. Investors should consider buying dips after this level holds.