The Nikkei share average in Japan is expected to rise by 4.6% by the end of the year, according to equity market strategists in a recent Reuters poll. Analysts predict the Nikkei to trade at 40,750 by the end of the year, up from its current close of 38,946.93.
Despite some companies issuing conservative earnings forecasts during the peak of earnings season, experts believe that these companies will likely raise their outlook towards the end of the year, boosting the Nikkei. Additionally, progress in corporate governance reform is expected to further push up share prices.
The Nikkei has been hovering below 40,000 since April, after reaching a record intraday high of 41,087.75 in March. Share buybacks and unwinding cross-shareholders have contributed to the index’s rally, with a 16.4% increase so far this year following a 28.2% gain in 2023.
While uncertainties about the yen’s movement against the dollar have impacted sentiment in the Japanese stock market, analysts believe that the negative impact will be limited. Despite potential risks such as a U.S. economic downturn and geopolitical tensions, experts do not foresee the Nikkei falling below 35,000 unless these events occur.
Overall, the outlook for the Nikkei remains positive, with expectations of continued growth supported by a solid global economy and corporate performance.