In April, the Nikkei Stock Average hit a new record high, driven in large part by specific companies, including 2 semiconductor manufacturing equipment companies, 1 specialty retailer and 1 AI-related holding company, while expectations of futures short covering also pushed the market higher.
Entering April, the Nikkei Stock Average rose on positive expectations for a ceasefire. Specific companies made a major contribution, with the impact of 2 semiconductor manufacturing equipment companies, 1 specialty retailer and 1 AI-related holding company particularly notable. The contribution figures are Nomura estimates based on data as of 15 April.
One factor pushing the Nikkei higher was short covering by futures investors, as CTA and macro funds had been positioned short. When the Nikkei Stock Average moved above ¥57,000, some investors began unwinding their short positions, which may have contributed to an excessive rise in the index.
By 15 April, 206 companies had announced their fiscal 2025 results. Many of these companies achieved 2.7% revenue growth and 4.3% ordinary profit growth in fiscal 2025. Company forecasts for fiscal 2026 call for 6.0% revenue growth and 6.3% ordinary profit growth, with 73% of companies expecting higher profit and 31% expecting to raise dividends. In terms of share price reactions, companies forecasting lower profit for fiscal 2026 appear to have underperformed, while companies that announced dividend increases or share buybacks may have performed relatively steadily.
Overall, the short-term direction of the Nikkei is expected to continue being shaped by the performance of specific companies and changes in futures positions. The source analyst report is identified as a progress report on the domestic Japanese equity caravan conducted as part of the Japan Stock Weekly series.