An estimate indicates that the Nikkei Stock Average could reach ¥240,000 by 2040, citing the outlook for EPS growth and nominal GDP growth as the underlying rationale. It also discusses trends in long-term interest rates and changes in the market environment.
Ishiguro Hideyuki (石黒 英之) of Nomura Asset Management estimates that the Nikkei Stock Average could reach ¥240,000 by 2040. The forecast is based on a scenario that assumes EPS earnings growth and nominal GDP growth, as well as the continuation of the current P/E ratio.
EPS earnings growth is assumed at 10% annually and nominal GDP growth at 3% annually. Together, these assumptions are used to explain the rise in stock prices. On this basis, the Nikkei Stock Average is expected to reach ¥240,000 in 2040.
The view is also expressed that rising long-term interest rates are unlikely to weigh significantly on stock prices, as companies are considered better able to secure profits through price pass-through in an inflationary environment.
Investment policies such as selecting companies capable of adapting to changes in the market environment and using index funds and actively managed funds are proposed, although this is limited to reporting these as events in the main text.