Investors are counting on solid gains to help Japanese stocks maintain their gains in the latter part of a volatile year that saw the market go from one of the world’s top performers to the epicenter of a global crisis.
While July’s record is unlikely to be reached again, the 225-issue Nikkei average could end the year down 1.3% from current levels to 39,844, according to the average forecast of nine analysts polled by Bloomberg September 27 to October 7. The broader Topix will rise 2.1% to 2,797, according to the average estimate of seven analysts, bringing annual gains for the Nikkei 225 to 19% and for the Topix to 18%.
Analysts have raised Topix’s earnings outlook throughout the year, with forward-looking earnings per share rising to around 188 points as the yen’s strength weakens and companies pass on higher input costs to consumers. Net profits at Japan’s 500 largest listed companies reached a record high of ยฅ15 trillion ($101 billion) in the quarter ended June.
