Nomura Holdings Inc chief executive officer Koji Nagai predicted Japanese stocks are set to rally over the next six years as economic expansion fuels corporate profits.
The Nikkei 225 Stock Average will climb to about 25,000 by 2020, up about 57 percent from today, the head of Japan’s biggest brokerage said at a forum in Tokyo.
“Growth of Japan’s economy is assured until 2020 as it will benefit from development in Asia,” Nagai, 55, said.
Nagai’s optimism contrasts with a stalling stock market.
The Nikkei 225 has fallen 2.5 percent this year after ending last year at a six-year high, as investors grow wary about whether Japanese Prime Minister Shinzo Abe’s policies of monetary easing, fiscal spending and structural reforms will boost the economy.
The yen will probably weaken to 120 against the US dollar from the current 109.5 about 2016 before stabilizing in the 110 range, Nagai said at the event, which was organized by the Nikkei newspaper.
Japan’s currency has fallen about 4 percent against the US dollar in the past month amid prospects of the central bank continuing unprecedented monetary easing while the US Federal Reserve weighs the timing of its first rate increase.
The yen touched a six-year low of 110.09 on Wednesday last week.
The Bank of Japan might end its policy of keeping interest rates at zero as soon as 2017, Nagai said.
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