According to Zhito Finance, Bruce Kirk, Chief Japan Stocks Strategist at Goldman Sachs, stated that the current level of the USD/JPY Exchange Rates is favorable for overseas investors to Buy Japanese Stocks. He believes that the risk of the yen falling below 160 is limited, as this could prompt Japanese authorities to take some form of intervention. As of Tuesday, the USD/JPY Exchange Rates were at 157.13.

This provides overseas Funds with the best opportunity to Buy Stocks at a relatively low price, as the depreciation of the yen reduces the possibility of these Stocks being devalued in USD terms in the future. Kirk stated that if the yen strengthens, it would also bring some opportunities to earn Forex gains. Although the Japanese stock market has recovered most of its losses since the sharp decline in August, many overseas Funds are still on the sidelines. Their return could provide the much-needed boost for the Topix Index to return to historical highs in 2025.

Goldman Sachs has a 12-month target for the Topix Index of 3100 points, while the index closed at 2726.74 points on Monday. In contrast, the UBS Group's forecast is 2900 points, while JPMorgan's forecast is 3000 points.

In Kirk's view, the reduced resilience of the USA stock market in the face of Japan's political uncertainty has diminished the motivation for overseas investors to return to the Japanese market. Kirk said in an interview: "It is very natural for foreign investors to withdraw from Japan. Now that we have passed the crisis, we are beginning to see foreign investors' interest in Japan rise again."

His team expects that, in the context of Share Buyback, the lifting of cross-shareholdings, and the Bank of Japan's interest rate hikes, Banks and Other Finance companies will perform well in 2025.

In his view, proactive investors are increasingly collaborating with companies to unlock value, which will also support the market. He also mentioned that Goldman Sachs has consistently received requests to screen some companies to see if they have the potential to leverage their substantial unrealized gains in Real Estate assets.

Editor/ping