TOKYO: Japanese stocks would stay upward in 2015, a number of market observers predict, with some saying the Nikkei Stock Average would reach the 20,000 range for the first time since 2000 amid enhanced corporate earnings.
“There is a chance that, given the pace of its climb and other factors, [the Nikkei average] will correct to 17,000 from January to March, but we are looking at 20,000 by the end of next year,” a Nomura Securities representative says.
An observer at SMBC Nikko Securities also indicates the index “will reach 21,000 in November” after edging itself higher over a period of time from the start of the year.
Many strategists depict stocks rising toward the end of the year. Through the second half, they see the continued weakening of the yen bolstering anticipation that exporters’ fiscal-year earnings will improve. Observers also expect increased returns of profits to shareholders amid those improved corporate earnings. Ajay Kapur, a strategist in Asia-Pacific equities at Bank of America Merrill Lynch, sees buybacks aimed at raising return on equity and profit per share as an investment theme of Japanese stocks in 2015.
“Stock prices will correct in June, when companies’ efforts to strengthen returns to shareholders run their course,” says Takuya Takahashi, senior strategist at Daiwa Securities. “But they will climb after that, driven by improved earnings.”
Shun Maruyama, chief Japan-equity strategist at BNP Paribas Securities (Japan), sees the Nikkei average’s high at 18,000 but says that “if there is additional monetary easing from the Bank of Japan, it will push 19,000.”
Many see the average’s bottom at 17,000 or so amid lingering concerns about falling crude oil prices and geopolitical risk, along with economic slowdowns in emerging markets.
The course of American monetary policy is one of the most-anticipated factors as well.
“If speculation peaks about a U.S. interest rate hike, every market will be rattled, and there’s a chance the Nikkei average would fall as low as 16,000 or so,” says Seiji Arai of Mitsubishi UFJ Morgan Stanley Securities.
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