Nikkei Stock Average Expected to Hit 40,000 Yen Level Next Week: Can It Sustain?

March 1st: The Nikkei Stock Average is expected to hit the 40,000 yen level for the first time in the Tokyo stock market next week, and attention will be focused on whether it can sustain that level. The photo shows the Tokyo Stock Exchange building. Photograph taken in October 2020 in Tokyo (2024 Reuters / Issei Kato)

TOKYO (Reuters) – The Nikkei average is expected to hit the 40,000 yen level for the first time in the Tokyo stock market next week, and all eyes on it being able to sustain that level will be firm. Amidst a series of announcements of important economic indicators at the beginning of the month, stock prices are likely to trend higher if expectations for an interest rate cut by the US Federal Reserve (Fed) increase. In Japan, there is likely to be momentum for wage increases ahead of the spring union, so Japanese stocks are expected to be bought in a wide range of industries, with high-tech and value sectors expected to remain firm.

The expected range for the Nikkei average is 39,500 yen to 40,500 yen.

The Nikkei Stock Average, which had risen about 6,400 yen since the start of the year, rose 824 yen to 39,990 yen.23 on the 1st, due to increased demand for semiconductors for artificial intelligence (AI) and expectations for an improvement in the price-to-book ratio (PBR) The price reached high and was only 10 yen shy of the 40,000 yen mark.

The Bank of Japan’s expectations for an early return to normality is a disturbing factor, but one domestic securities strategist says, “Raising negative interest rates has already been considered, so it does not appear to be a stock-pushing factor down. prices.” On the 29th, Bank of Japan Adviser Hajime Takada said, “We are finally in a position where we can see the 2% inflation target achieved.” Although the market responded by appreciating the Yen and lower stock prices, on the 1st the next day, the Yen returned to a weaker trend. , and the Nikkei average hit a new all-time high.

Chiaki Hirokane, strategist at Resona Holdings, said, “Expectations for a virtuous economic cycle due to the normalization of monetary policy, including raising negative interest rates, and wage increases are likely to lead to a slow start and a cyclical focus on the value sector.” next week, value and high-tech will become firm, and the Nikkei average will likely aim for the 40,000 yen mark.

Next week, Federal Reserve Chairman Jerome Powell will testify before Congress, and the ISM Non-Manufacturing Business Index and employment statistics for February will be released. Domestically, the February consumer price index for Tokyo and wards, as well as the aggregate results of the Japan Federation of Trade Unions’ calls for wage increases, will be published.

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