Japan's Nikkei to Hit Record 69,000 by 2027

Japan's Nikkei to Hit Record 69,000 by 2027

AI exuberance and robust earnings will continue to power Japan's Nikkei to record highs. According to a Reuters poll, the benchmark index is forecast to reach 69,000 by end-2027.

Key Drivers

The Nikkei has surged nearly 70% in the past two years, outpacing US, Chinese, and European indexes. AI optimism, strong corporate earnings, and governance reforms by the Tokyo Stock Exchange are fueling the rally.

Analyst Views

Yunosuke Ikeda of Nomura Securities notes that the rally has outpaced forecasts but earnings growth remains stable even without AI. Hiroshi Watanabe of Sony Financial expects inflation to expand the economy and corporate profits, supporting equities.

Risks and Correction

Half of the poll respondents see a high likelihood of a 10% or more correction in the next three months. IG Markets' Tony Sycamore predicts a slide to 55,000 by year-end.