😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Japanese stocks due for more upside, Nikkei seen at 45,000- UBS

Published 2024/04/25, 06:22
© Reuters.
USD/JPY
-
JP225
-
TOPX
-

Investing.com-- Japanese stocks are expected to strengthen in the coming months with the Nikkei 225 set to hit new record highs this year, UBS analysts wrote in a note, citing optimism over progress in business reforms and strong earnings. 

The Nikkei 225 is expected to close the year at 45,000 points while the broader TOPIX is set to reach 3,120 points- both record highs, UBS analysts said. The figures represent upsides of 19% for the Nikkei and about 17% for the TOPIX from current levels. 

The main performers in Japanese markets are expected to be export-oriented businesses, with UBS also forecasting more weakness in the yen. The brokerage expects the USDJPY pair to close out 2024 at 160, citing a dovish Bank of Japan and higher-for-longer U.S. interest rates. 

UBS said certain Japanese stocks also represented increased value for shareholders from buyback announcements, particularly in the automobile, financials and consumer goods sectors. 

“... alongside continuing steady growth in earnings, we anticipate progress with business reforms including the expansion of shareholder returns and growth strategies. We expect valuations to improve further,” UBS analysts wrote in a note. 

After a stellar performance through the first quarter, Japanese stock markets were now nursing steep losses through April, driven by a mix of profit-taking and as investors priced out some artificial intelligence-fueled enthusiasm from the technology sector.
But this trend could change as Japan’s first-quarter earnings season picks up pace, with UBS forecasting resilience in corporate earnings. 

A persistently dovish BOJ could also attract more capital flows into Japanese markets. While the central bank did hike interest rates for the first time in 17 years in March, it provided a largely dovish outlook on future hikes. 

An ultra-dovish BOJ was also one of the key drivers of a Japanese stock market rally over the past two years, especially as interest rates in other developed economies rose sharply. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.