Forecasters Scramble as Nikkei Hits New Peaks

Japan's Nikkei index is expected to continue its ascent to record highs, fueled by AI optimism and robust corporate earnings, a Reuters poll indicates. Forecasters anticipate the benchmark index could reach 69,000 by the end of 2025, following its recent record of 65,408.87. AI enthusiasm is a primary driver, with seven of twelve respondents maintaining their positive outlook. However, stable earnings growth, even without AI, is seen as a sustainable factor for stock gains, contributing to the Nikkei's upward trajectory.

Japanese equities have benefited from additional tailwinds beyond the global AI boom. Reforms centered on shareholder-focused governance and growth-oriented policies have bolstered market sentiment. Consequently, the Nikkei has seen a significant surge, outperforming major indexes in the United States, China, and Europe over the past two years. Despite some predictions of a potential pullback, the underlying economic and corporate performance suggests a continued uptrend.