Business / Financial Markets

Nomura exec sees Trump presidency extending Japan's stock rally next year

Bloomberg

Policy pledges by U.S. President-elect Donald Trump are bullish for Japanese share prices, which will build on their recent gains in 2017, according to Norikazu Akedo, a senior managing director at Nomura Holdings Inc.’s brokerage unit.

Trump’s election win was a “great turning point” for Japan equities, due to his commitments to invest in infrastructure and cut taxes, said Akedo, 50, who is also joint head of global markets Japan at Nomura, the country’s largest brokerage firm.

Nomura has predicted that the Nikkei 225 stock average will rise to between 20,500 to 21,000 points by the end of next year, as much as 14 percent above Friday’s close of 18,381.22, according to a forecast issued Nov. 18. The probability is “not so little” that the index will exceed the view “to a large extent,” Akedo said in an interview, while declining to give a precise prediction.

Japanese investors, however, have lagged behind their international peers in interpreting the Trump win as bullish for the local market. “Foreign investors have been fairly aggressive to purchase Japan stocks since the U.S. presidential vote, while the temperature of local investors is rather mild,” said Akedo.

Purchases of Japanese equities by foreign investors at exchanges in Tokyo and Nagoya exceeded sales by ¥891 billion ($8 billion) between Nov. 7 and 18, while Japanese insurers, banks and asset managers’ sales surpassed purchases by ¥304 billion, according to Japan Exchange Group Inc.

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