Is the Nikkei Average still up 37%? Can we reach 55,000 yen by the end of next year?

The Nikkei Stock Average broke through 40,000 yen on Monday.

The reasons behind the Nikkei Average exceeding 40,000 points include a rapid increase in global demand for high-tech stocks centered on artificial intelligence, a boost from the Bank of Japan's gentle monetary policy, and an important role played by the depreciation of the yen in increasing Japan's export competitiveness globally.

Jesper Coll (Jesper Coll), an economic expert at the Japanese financial group Monex Group, had previously accurately predicted a record high of 40,000 points. And now, we announced the latest forecast that the Nikkei Average will rise another 37% by the end of 2025, aiming for 55,000 points.

Mr. Coll's optimism stems from Japan's strong private sector performance and excellent corporate profitability. The fact that Warren Buffett, the god of investment, has increased his holdings in Japan's top 5 trading companies in the past few years has also raised confidence in the Japanese stock market.

On Tuesday (3/5), the Nikkei Stock Average fell slightly from Monday's high, but remained in the 40,000 point range. Currently, the Nikkei average is 40,097.63 points.

Coll emphasized that most of Japan's economic potential comes from the private sector. Japanese companies have achieved excellent profitability through a management concept called “kaizen.” This approach not only improved productivity, but also fostered an innovative and efficient corporate culture within Japanese companies.

According to Cole's analysis, from 1995 to 2022, sales of TSE stock price index constituent companies surged 1.1 times and profit per share surged 11 times, surpassing the performance of S&P 500 index companies during the same period. This clear growth has highlighted the effectiveness of Japan's corporate management strategy, which creates significant economic value.

It also emphasized that Japan's commitment to strengthening corporate governance and attracting international investment continues to be strong. Japanese stocks are becoming increasingly attractive to global investors due to measures aimed at increasing shareholder value, promoting diversity in the board of directors, and improving transparency.