With long-term interest rates reaching the 3% range for the first time in 30 years, the resilience of Japanese stocks is being tested. No level at which rising interest rates would undermine stock prices has yet emerged, and views are gaining ground that companies' earnings growth scenario will remain intact.
Long-term interest rates reached the 3% range for the first time in 30 years. The stock market has remained near its highs despite facing headwinds from rising interest rates. A new phase is being sought for Japanese stocks' resilience to interest rates, and investors' attention is turning to the relationship between the extent of rate increases and stock prices.
Questions from Tomoya Kitaoka (北岡智哉), chief equity strategist at Nomura Securities, convey the growing uncertainty among overseas investors over the level at which long-term interest rates would undermine stock prices. While 4% has been cited as a potential limit, no specific market breakdown has yet been observed.
The article is available to members, and focuses on the issues surrounding the impact of changes in the interest-rate environment on companies' earnings growth scenarios and the market outlook.
Overall, some continue to share the view that corporate earnings growth will support the market even as long-term interest rates continue to rise.