By Kevin Buckland
In a recent Multibagger poll, analysts predict that the Nikkei 225 share average will continue its recovery from the worst sell-off in 37 years and reach an all-time high by the end of 2025.
The forecast shows that the Nikkei will rise by 7% to 40,000 by the end of this year, then rally to 42,000 by the end of June 2025, ultimately reaching a record 42,500 by the end of next year. Currently, Japan's benchmark stock index closed at 37,388.62 on Monday.
Market analyst Tony Sycamore from IG stated, "Valuations remain attractive, interest rates remain low, and corporate reforms continue to progress," highlighting the positive factors driving this growth.
However, Sycamore also warned that the Nikkei could face another pullback in 2024 due to the Bank of Japan's rate hikes and increased global market volatility. Nevertheless, he expects the yen's impact to lessen by year-end.
The Nikkei hit an all-time high on July 11 but experienced a sharp decline following a rebound in the yen and concerns about the Federal Reserve's interest rate decisions. The market saw a significant drop on August 5, but has since stabilized with improved U.S. economic indicators and a reassessment by the Bank of Japan.
Looking ahead, analysts anticipate strong financial results and corporate reform efforts to support the Nikkei's performance into next year. Despite some expectations of near-term volatility, many analysts believe that the recent market correction has created buying opportunities for long-term investors.
Overall, the outlook for the Nikkei 225 share average is optimistic, with expectations of continued growth and potential for reaching new record highs in the coming years.
(Other stories from the Multibagger Q3 global stock markets poll package)
Analysis:
The article discusses the positive forecast for the Nikkei 225 share average, predicting a recovery from recent lows and a potential all-time high by the end of 2025. Analysts cite attractive valuations, low interest rates, and ongoing corporate reforms as key drivers of this growth.
While some caution against potential pullbacks in 2024 due to market volatility and central bank policies, overall sentiment remains optimistic. The recent market correction has created buying opportunities for long-term investors, with expectations of strong financial performance and continued reform efforts supporting the market.
For individuals looking to invest in the Japanese market, this article provides valuable insights into the potential future performance of the Nikkei and the factors driving its growth. It highlights the importance of staying informed about market trends and being prepared to capitalize on opportunities for long-term financial gain.