Investors are counting on solid earnings to help Japanese shares hold their gains in the final stretch of a volatile year that saw the market go from one of the world’s top performers to the epicenter of a global meltdown.
While unlikely to revisit the record hit in July, the 225-issue Nikkei average may finish the year up 1.3% from its current level to 39,844, according to the average forecast of nine analysts surveyed by Bloomberg from Sept. 27 to Oct. 7. The broader Topix will tick up 2.1% to 2,797, the average estimate of seven analysts showed, bringing the annual increase to 19% for the Nikkei 225 and 18% for the Topix.
Analysts have been upgrading the Topix earnings outlook throughout this year, with forward looking earnings-per-share rising to about 188 points, as the yen’s strength wanes and companies pass on higher input costs to consumers. Net profits at Japan’s 500 biggest listed companies hit an all-time high of ¥15 trillion ($101 billion) in the quarter ending in June.
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