Japan’s Nikkei is opening in a softish manner this morning, dropping under 38K for the first time since December 2.
Reuters report on their survey of analysts.
- Nikkei 225
is forecast to rise 4.6% to 40,000 by mid-2025 - 11.15% to 42,500
by year-end - outlook
remains unchanged from the November 2024 poll
Key Drivers:
- Analysts expect
stronger earnings once uncertainties over U.S. tariff policy under
President Donald Trump are resolved. Japanese automakers and
manufacturers remain cautious, given their reliance on factories in
Mexico and Canada.
Bank of Japan (BOJ)
Policy
- The BOJ is expected
to raise rates from 0.50% to 0.75% this year, which could influence
investor sentiment. Once rate hikes stabilize, foreign investors may
return to Japan’s market.
Currency Risks
- A stronger yen could
dampen exporter profits, limiting market gains. The yen recently hit
a 2.5-month high, affecting corporate earnings expectations.
Market Uncertainty
- If U.S. tariffs
trigger a trade war, some analysts predict a 10% Nikkei decline,
particularly impacting automakers.
Despite risks,
analysts remain optimistic, citing potential record profits for
Japanese firms in the next fiscal year.
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Update:
Weekly candles Nikkei 225