Investors expect the pace of Japan’s stock market rise to slow in the second half of the year. This means there is a greater risk that they will transfer more money to competitive markets.
The benchmark Topix index is set to rise about 2.9% to 2,890 by year-end, while the 225-issue Nikkei average is set to rise about 4.8% to 41,489, according to the median estimates of money managers and strategists polled by Bloomberg. That’s a fraction of the gauges’ roughly 18% advance in the first six months. The broader Topix surpassed its March intraday peak on Friday to a 34-year high, led by financials.
Concerns about continued yen weakness are weighing on market sentiment. Moreover, consumers and businesses have cut back on spending, while a third of Bank of Japan watchers surveyed by Bloomberg earlier this month predicted a rate hike in July. Inflation figures for Tokyo released Friday morning increased in June, leaving a possible rate hike likely on the agenda for discussions at the Bank of Japan’s July meeting.
