On March 1st, the Nikkei 225 index closed up 1.9% at 39910.82 points, reaching a peak of 39990 points during the day. It rose more than 2% during the day, once again setting a new historical high. Within the year, the Nikkei 225 index has risen by nearly 20%.
Great Wall Securities believes that the depreciation of the Japanese yen promotes export growth, drives economic growth, and ultimately drives the rise of the Nikkei 225 index. The depreciation of the Japanese yen is due to the interaction of domestic and foreign monetary policies. The United States will start a rate cutting cycle in the second half of 2024, while Japan is considering exiting negative interest rates. If one wants to lower interest rates and the other wants to raise them, the interest rate difference between the two countries may narrow. The Japanese yen may appreciate, and the appreciation of the yen may also indicate that Japan's exports may slow down, affecting economic growth, and the Nikkei 225 index may peak and decline.
According to a research report by Guotai Junan, the recent rise of the Nikkei 225 index is mainly driven by performance rather than valuation. It is expected that the Nikkei 225 index will achieve a positive return of less than 23% in 2024, and Japanese equity assets have certain strategic and tactical allocation value for global investment portfolios.