Key Facts
• August 13, 2025: Nikkei 225 hits record closing high of 43,274.67, up 556.50 points.
• TOPIX also achieves consecutive record highs.
• Nikkei 225’s Price-to-Earnings Ratio (PER) rises to 17.54x, surpassing the 14–16x range of recent years.
• Analysts suggest PER could expand to 20x, supported by nominal GDP growth.
• Current EPS (Earnings Per Share) stands at ¥2,435, down from ¥2,520 in late July.
• Low real interest rates and yen depreciation justify higher PER levels.
• Market sentiment reflects a shift, with foreign investors viewing Japan’s PER as undervalued compared to Western markets.
• Rapid stock price increases signal short-term overheating, with mixed trends in individual stocks.
• SoftBank Group closes slightly higher but experiences intraday losses of up to 1.9%.
• Analysts predict a mix of profit-taking and dip-buying in the near term.
Summary
Japan’s stock market is experiencing a ‘new normal,’ with the Nikkei 225 and TOPIX reaching record highs. The Nikkei’s PER has risen to 17.54x, surpassing historical ranges, and analysts see potential for it to expand to 20x, driven by nominal GDP growth and low real interest rates. Despite a decline in EPS, foreign investors view Japan’s PER as undervalued compared to Western markets. However, rapid stock price increases have raised concerns about short-term overheating, with mixed performance among individual stocks. Analysts anticipate a balance between profit-taking and dip-buying in the coming days.
