Japan’s Nikkei 225 share average is expected to drop 4% from its 33-year highs, returning to the psychologically key 30,000 level by year-end and trading around the same level in mid-2024, according to the median estimates of analysts polled by Reuters.
The range of forecasts varied widely, however, revealing a deep split over the outlook for the benchmark index. Bulls cited the Tokyo Stock Exchange’s push for stronger corporate governance and the outlook for continued ultra-easy monetary policy from the Bank of Japan, while bears highlighted the importance of corporate earnings and the risk of a sputtering post-lockdown recovery in China.
Four analysts set a target of precisely 30,000 for year-end, indicating a 3.1% fall from Tuesday’s close. The range was also wide for the ten mid-2024 forecasts, spanning 25,000 to 35,100, with two calls at exactly 30,000.
The Nikkei’s path in the coming three months is uncertain, with four analysts expecting narrow range-bound trading, two favouring rallies of 10% or more, and two seeing a 10% correction as the most likely outcome.
Overall, the outlook for the Nikkei remains uncertain, with analysts split over whether the index will continue its ascent or take a breather.