Earlier this week, Honda Motor and Nissan confirmed they are in talks about a possible merger at time of auto industry upheaval. Toyota stock cleared a key level on Friday. Honda stock rallied further above a technical level,

The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.