TOKYO :”Nikkei Expected to Hit Record High by 2025: Reuters Poll”, Japan’s Nikkei 225 share average will extend its recovery from the worst sell-off in 37 years during the rest of 2024 before pushing to an all-time high by the end of next year, according to forecasts in a Reuters poll.
The Nikkei will rise 7 per cent to 40,000 by year-end before rallying to 42,000 by end-June and then to a record 42,500 by the end of 2025, median forecasts from an Aug. 8-20 poll of 18 analysts showed. Japan’s benchmark stock index closed at 37,388.62 on Monday.
“Valuations remain attractive, interest rates remain low, and corporate reforms continue to progress,” said Tony Sycamore, a markets analyst at IG.
The Nikkei could suffer another pullback in 2024 “as the Bank of Japan continues to raise rates and due to higher volatility across global markets”, Sycamore said.
Traders unwound carry trades funded with the Japanese currency en masse after the BOJ unexpectedly shifted to a hawkish stance, while a run of weak U.S. economic data spurred bets the Federal Reserve would need to rush to cut interest rates.
Surprisingly soft payrolls data at the start of this month was the catalyst for the Nikkei to crash 12.4 per cent on Aug. 5, touching its lowest since Halloween and ending with its biggest one-day drop since Black Monday in 1987.
Improved U.S. macro indicators since then and a BOJ backtrack have seen equity markets stabilise, and analysts overall expect the strong financial results and corporate reform push – led by the Tokyo Stock Exchange and backed by the government – that lifted the Nikkei at the start of the year to continue to buoy it into next year.
