Attention is focused this week on Fed Chair Powell’s keynote speech, while debate continues over whether a 17x P/E ratio is expensive as the Nikkei 225 holds near its all-time high.
The key event this week is Fed Chair Powell’s keynote speech at the Jackson Hole meeting, scheduled for 21–23 August. The speech is expected to focus on the factors behind the current rising market and the outlook for future monetary policy, with the possibility that the reaction in the overnight futures market on 22 August could spread to other markets.
The Nikkei 225 moved into a new all-time-high price range on Monday, 18 August. It has risen by approximately ¥3,400 in a short period from its recent low. While some expect the index to continue holding at this level, the risk of a sharp decline cannot be ruled out.
There is ongoing debate over whether a 17x P/E ratio is expensive. One view presented is that changes in the market environment and expectations for corporate growth are among the factors explaining the current upward trend. The article stresses the need for thinking that adapts to differences between eras and changes in the environment, and points out the limitations of arguments based on applying historical ranges to current conditions.
Finally, against the backdrop of changes in investment styles and the trading environment, the article concludes that how the Nikkei 225’s rise should be interpreted will depend on future market developments.