According to analysts from leading Wall Street investment banks, Japanese stock indices are expected to continue their growth in light of increased interest from global investors in Japanese companies.
Recently, the TOPIX index reached its highest level in 33 years, reaching 2188.66 points, the highest since July 1990.This sharp increase is attributed to the return of foreign investors to the Japanese market.
Goldman Sachs analysts note that Japanese stocks are still undervalued by foreign investors, but they believe that Japanese companies will benefit from “structural changes” in the country’s economy. Additionally, the launch of a new structure for the Tokyo Stock Exchange, aimed at increasing shareholders’ income, is also a positive factor highlighted by experts. Goldman Sachs strategists are confident that if investor expectations are met, Japanese stocks will demonstrate sustainable growth in the medium term.
Bank of America also predicts further inflow of foreign investors and has raised its forecasts for Japanese indices by the end of the year. They predict that the TOPIX index will reach 2200 points, while the Nikkei 225 index will rise to 32,500 points, with the potential to reach 33,500 points. Both forecasts imply a potential growth of 6% from current levels.
Analysts also point out several factors that may contribute to further growth in Japanese stock indices. One of them is the stabilization of the global economic situation after a period of uncertainty related to the COVID-19 pandemic. Improvement in economic activity in various regions of the world can support the growth of Japanese companies, especially in export-oriented sectors.
Furthermore, the Japanese economy expects the implementation of structural reforms aimed at enhancing the efficiency and competitiveness of companies. The country’s government is taking steps to promote innovation, digitization, and reduce bureaucratic burdens on businesses. These measures can improve the financial performance of Japanese companies and attract additional investments.
In addition, the domestic market in Japan also plays a significant role in the growth of stock indices. Consumer demand is stabilizing, and with increasing wages and improved working conditions, an increase in consumer spending is expected. This can contribute to profit growth for companies, especially in the retail and services sectors.
Overall, analysts see prospects for further growth in Japanese stock indices and believe that investors should consider the potential of the Japanese market when forming their investment portfolios. However, as with any investments, it is important to be aware of potential risks and exercise prudent portfolio management.
