Japan’s stock market needs to see more domestically-oriented companies step up their game to fuel further rallies, but the outlook for wages and the yen complicates the picture.
The focus has turned to earnings announcements for the fiscal year ended March 31 for sectors that are underperforming the broad Topix Index, such as transport, retailers and food companies. About 60% of Japanese firms report in the weeks ahead.
The surge in Japanese equities since last year has been powered mainly by exporters including carmakers and chip-related firms, which benefited from a depreciating currency and semiconductor demand. But the weak outlook for the global chip market and cautionary comments about the yen’s plunge from Japanese business leaders have weighed recently.