JPMorgan has upgraded its long-term outlook for Japanese equities, raising its end-2026 targets for both major stock indices.

📈 Updated forecasts (end of 2026):

• Nikkei 225: 61,000
• Topix: 4,100

The revisions reflect growing confidence in Japan’s equity story, which has gained strong momentum over the past two years.

📊 Earnings growth JPMorgan expects continued improvement in corporate profitability, supported by:

• operational efficiency gains
• shareholder-friendly policies
• pricing power amid moderate inflation

🏢 Corporate governance reforms Ongoing pressure on companies to improve ROE, capital allocation, and transparency remains a key structural tailwind, especially for Topix-listed firms.

🌍 Foreign capital inflows Japan continues to attract global investors seeking:

• diversification away from US tech concentration
• exposure to a large, liquid market
• relative valuation appeal versus US equities

💴 FX dynamics A weaker yen continues to support exporters’ earnings, while FX volatility itself has become a tradable theme for global macro funds.

• Nikkei 225 is expected to benefit from large-cap exporters, tech, and industrials
• Topix reflects broader market strength, including financials, value stocks, and domestically focused companies

JPMorgan’s more aggressive Topix target suggests confidence beyond just mega-cap names.

⚠️ Despite the bullish outlook, JPMorgan highlights several risks:

• sharp yen appreciation
• global growth slowdown
• geopolitical escalation in Asia
• tighter-than-expected financial conditions

JPMorgan’s upgraded targets reinforce the narrative that Japan remains one of the strongest structural equity stories globally.

For traders:

• 📈 Japan stays a trend market
• 💴 JPY volatility remains critical for stock performance
• 🌏 Global macro headlines still drive short-term swings