The Nikkei Average is said to have the potential to recover to 70,000 by the end of fiscal 2026, supported by the AI and semiconductor boom and demand support from measures to address higher prices. Meanwhile, stagnant real wage growth has not been reflected in people’s lived experience, and some believe that the “high stock prices, weak economy” environment will continue.
The Nikkei Average exceeded 50,000 in October 2025, broke above 60,000 in April 2026, and moved into the 70,000s in June. It subsequently traded in the low 60,000s amid a correction in semiconductor stocks and the impact of the U.S. midterm elections.
On 6 November, concerns spread that AI and data center investment would be restrained amid speculation that the Democratic Party would win both chambers of Congress, sending the Nikkei sharply lower and at times below 60,000. However, the AI and semiconductor sectors are expected to remain strong, and the Nikkei is said to have a high likelihood of recovering to 70,000 by the end of fiscal 2026.
The rise in share prices is attributed to the strength of global AI-related investment as well as demand support from measures to address higher prices, with one view holding that nominal corporate earnings are expanding and pushing up stock prices. Others have pointed out that measures to address higher prices have not translated into meaningful real wage growth.
Even if the Bank of Japan proceeds with interest-rate normalization and long-term interest rates rise, the lackluster, perception-defying stock market boom known as a “high stock prices, weak economy” may continue, according to one view.