Japan’s benchmark Nikkei index is expected to scale fresh record highs and may touch 69,000 by the end of 2027, according to a Reuters poll of market analysts, as enthusiasm around artificial intelligence and strong corporate earnings continue to fuel one of the world’s strongest equity rallies.
The Nikkei was up 1.25% at 65,811.78, as of 0147 GMT, after rising as much as 2.2% earlier in the day to hit a record intraday high of 66,428.81. The broader Topix edged 0.15% higher to 3,944.19 , extending a powerful rally that has seen Japanese equities outperform many major global peers over the past two years.
Analysts surveyed by Reuters believe the momentum could continue despite concerns that valuations have risen sharply in a short span.
The rally has been driven largely by technology and semiconductor-linked stocks, mirroring gains seen in U.S. markets amid the global AI boom. Japanese chip-related companies and AI-focused investment firms have witnessed sharp gains, helping push the broader market to new peaks.
Investors are also drawing confidence from stable earnings growth, corporate governance reforms promoted by the Tokyo Stock Exchange, and pro-growth economic policies in Japan. Market participants believe these structural factors are providing additional support beyond the AI-driven optimism.
Despite the bullish long-term outlook, analysts remain cautious about near-term volatility. The Reuters poll showed that median forecasts for the end of 2026 remain below current levels, indicating expectations of periodic corrections after the market’s steep climb in recent months.
Japanese equities have surged nearly 70% over the past two years, significantly outperforming benchmark indices in several major global markets, including the United States, Europe and China. The Nikkei’s resurgence marks a dramatic turnaround for a market that spent decades below its late-1980s bubble-era highs.
