JPMorgan expects AI and corporate reform to drive the Nikkei Index to 75,000 points by year-end

The brokerage raised its target for Japan’s TOPIX Index from 4,300 to 4,400 points. Strategists including Rie Nishihara wrote in a report that in the second half of this year, negative factors such as Bank of Japan interest rate hikes and geopolitical risks are expected to be offset by positive drivers from the AI semiconductor cycle, as well as structural changes such as balance sheet improvements and corporate growth strategies. They wrote that the pace of the global AI super cycle is advancing faster than anticipated. Although the stock market has surged sharply, valuations of the TOPIX Index have cooled, easing concerns about market overheating. JPMorgan stated that it sees upside risk to profit growth; downside risks include “excessive yen depreciation” and rapid increases in interest rates.