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
