2024日本股市和经济展望-英-42页_1mb

Outlook for Japanese Stock Market & Economy Summary

The report by Sumitomo Mitsui DS Asset Management, authored by Hisashi Shiraki, presents a bullish outlook for the Japanese equity market and economy. Key factors include mild inflation supporting corporate earnings, steady economic growth, and a weakening yen, which are expected to drive positive trends. The firm has raised price targets for the TOPIX index from 2,540 to 2,660 and the Nikkei 225 from 37,100 to 37,500 by the end of March 2024, based on upward revisions in earnings forecasts. Growing confidence in the price-wage virtuous cycle could further boost market performance.

The market outlook remains bullish, with expectations of a resumption of upward trends after the Federal Reserve's current tightening cycle. Upside risks include the Fed's pivot to monetary easing, the virtuous cycle between inflation and wages, and recovery in inbound travel from China. Downside risks include excessive yen appreciation hurting corporate earnings, renewed concerns about global financial system risks, and prolonged global economic slowdown.

Regarding the Japanese economy, real GDP growth forecasts have been revised upward, with a 2.5% increase expected for FY 2023 and 1.1% for FY 2024, driven by strong exports, personal consumption, and capital investment recovery post-COVID. Inflation is expected to slow, with core CPI rising to 2.8% for FY 2023 and 1.8% for 2024, though wage increases may delay a decline below 2%. The Bank of Japan's monetary policy is unlikely to change soon, with yield curve control remaining in place. Corporate earnings and governance expectations are positive, with shareholder returns beating historical highs, though ROE lags behind some peers.

Macroeconomic indicators show net exports boosting GDP, sticky core inflation despite falling import prices, and resilience in services and manufacturing PMI. Inbound travel from China is recovering slowly, and durable goods sales are normalizing, indicating economic normalization. However, risks include political uncertainty, potential yen strength, and global economic conditions.

Overall, the outlook is optimistic, but vigilance is needed for potential downside risks.