Miyazaki Hiroshi (宮嵜浩), CIO at Nomura Securities, explains the long-term outlook for Japanese equities. Nomura presented three potential levels for the Nikkei 225 in fiscal 2035: approximately ¥114,000 under the base-case scenario, approximately ¥146,000 under the high-growth scenario, and approximately ¥91,500 under the cautious scenario.
Nomura Securities developed several long-term scenarios for Japanese equities and estimated the level of the Nikkei 225 in fiscal 2035, based on its outlook for corporate earnings growth and changes in market conditions. The previous estimate was based on assumptions published in 2025, while this review reorganised the high-growth realization scenario as the base-case scenario.
The estimated Nikkei 225 levels for fiscal 2035 were ¥110,448 under the base-case scenario, ¥91,554 under the cautious scenario, and ¥146,142 under the high-growth realization scenario. Assumptions for EPS growth and the PER were also set for each scenario, reflecting future earnings growth and interest-rate trends.
The high-growth realization scenario assumes EPS growth of 9.5% and a PER of 18x. The base-case scenario assumes EPS growth of 6.8% and a PER of 17x, while the cautious scenario assumes EPS growth of 6.1% and a PER of 15x. Estimates of real GDP growth, including the contribution from overseas growth, also differ among the scenarios.
The scenarios also incorporate the Cabinet Office's medium- to long-term estimates, IMF forecasts and the contribution from overseas growth as inputs, with forward PER assumptions set for each scenario. The analysis indicated that expectations for growth in AI-related stocks and changes in risk tolerance could affect trends in PER levels.