The soaring 225-issue Nikkei average may set a new all-time high and exceed 40,000 in 2024, some strategists said Friday.

The index's all-time high was set in 1989 when it reached 38,915.

The analysts think Japanese stocks will remain firm throughout the year amid expectations for improved corporate earnings.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, predicted that the Nikkei will reach 41,800 at the end of December. On Friday, the Nikkei ended at 35,577.11.

The strategists expect investors both at home and abroad to become more active as earnings improve at semiconductor-related firms and other Japanese businesses, while the U.S. Federal Reserve is expected to cut interest rates.

"The Japanese economy is solid, and wage increases will be higher than last year," Ichikawa said.

Hikaru Yasuda, chief equity strategist at SMBC Nikko Securities, said that "investors are paying close attention" to companies' actions to improve their capital efficiency following a request by the Tokyo Stock Exchange.

Mutsumi Kagawa, chief global strategist at Rakuten Securities' Economic Research Institute, said that he is focusing on the impact of the recent expansion of the NISA tax-free savings program.

"Individual investors' money is going not just to foreign stocks but also to Japanese stocks," Kagawa said.

On the other hand, Hiromi Ishihara, head of the equity investment department at Amundi Japan, said that there was a sense the market may be overheating.

Ishihara noted downside risks such as slowing U.S. and Chinese economies and a rapid appreciation of the yen.

"Japanese stocks are no longer viewed as being cheap," Shingo Ide, chief equity strategist at NLI Research Institute, said, suggesting that the Nikkei is unlikely to head significantly higher.