The Nikkei average briefly topped ¥60,000 on 23 April, but closed at ¥59,140.23, down ¥445.63 from the previous day. A Nomura Securities strategist said the high was only a waypoint and pointed to futures-driven swings and other special factors as the backdrop.
The Nikkei average briefly topped ¥60,000 on 23 April, but closed at ¥59,140.23, down ¥445.63 from the previous day. A Nomura Securities strategist said that, over the long term, breaking through ¥60,000 was merely one waypoint.
The Nikkei's gain in April exceeded TOPIX's by 8 percentage points, suggesting signs of overheating, while TOPIX's most recent peak was on 16 April. The 4 constituent stocks in the semiconductor manufacturing equipment, retail and AI-related sectors were reportedly a major factor driving the rise.
Futures short-covering also had a significant impact, and the unwinding of short positions in stock-index futures held by foreign investors may have excessively amplified the rebound in the equity indexes. At the same time, the entities moving the futures market are also said to engage in trades that are opened at low prices and closed at high prices, leaving the sustainability of the move in the short term uncertain.
Nomura Securities' main forecasts put the Nikkei average at ¥60,000 at the end of 2026 and ¥63,000 at the end of 2027, while TOPIX is projected at 4,000 and 4,200, respectively. In the upside scenario, the Nikkei average could rise to ¥67,500 at the end of 2026 and ¥72,000 at the end of 2027.
Structural factors, including the Bank of Japan's holdings through ETFs, and the holdings of medium- to long-term investors tracking the Nikkei average are also said to affect the magnitude of price movements.