Nikkei 225 to rally towards its all-time high of 38,915 in the next two years – DBS Bank

Accommodative policies, rising tech exports and Suga’s restructuring plans bode well for the Nikkei 225, which reclaiming 30,000 beckons more to come, economists at DBS Bank brief report.

Key quotes

“Accommodative monetary policies such as bond and equity purchases, negative zero interest rates and yield targeting remain to aid the recovery. Vaccinations are starting this week and targeted towards the whole of Japan’s population, with plans to produce AstraZeneca vaccines in Japan.”

“A major re-rating catalyst for the market would be the Olympics, which if held smoothly, could lead to a huge comeback for the tourism sector.”

“New prime minister Yoshihide Suga has pledged to restructure and reinvigorate the Japanese economy. More meaningful measures that may present opportunities for investors are the opening of the financial sector, an upgrade of the nation’s digital capabilities, a new industrial revolution for Japan Inc, consolidation of the banking sector, the promotion of competition in the telecom sector, and the facilitation of consolidation among small and medium-sized enterprises.”

“Japan’s Nikkei 225 Index broke 30,000 for the first time since 1989. We believe there is a high probability that the index can climb towards its all-time high of 38,915 in the next two years.”