Since the beginning of the year, the Japanese main index lost almost 5.6% but last week fell more than 1.5% and made a phase change, shifting from a warning to a distribution phase. Last week the Japanese index initially tried to rally but quickly found resistance near the 38.2 Fibonacci retracement to reverse and closed near the low of the week, however managed to close within the previous week range, which suggests being slightly on the bearish side of neutral. The stochastic is a strong bearish momentum and is below the 50 mid line. The Japanese Index continues consolidating but this time with a narrow range from 21,925 down to 20,985 and seems to be holding on to the 50-week moving average that is providing a dynamic support. Expecting an upward move to a weekly resistance at 22,470 on a bounce from the weekly support at 20,985 (scenario 1) however a bounce from the weekly resistance at 22,470 may rattle the bears again pushing the index down toward the Fibonacci retracement at 21,925 (scenario 2).