Outlook for the Nikkei average this week [30 November 2025]

 [Fundamental viewpoint]

Last week in the U.S. markets, stock indices rose for the week on speculation that the Federal Reserve would cut its policy interest rate by 0.25% in December.

Weekly Change Rate: NY Dow: +3.18%, NASDAQ: +4.91%, S&P 500: +3.73%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.29 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 22.6 and the Nikkei 225's P/E ratio of 18.8 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.29 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 24.9 Or, the Nikkei 225 will be around 66,430 yen.

As a result, the Japanese market is undervalued by about 16,180 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately 16,180 yen less attractive than the US market. Last week, the weakness in the Japanese market diminished.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

②    Following the announcement of financial results, the projected ROE for Nikkei 225 constituent companies stands at +8.9%. This remains unchanged from three months ago. The profit growth rate is -23.9, representing an improvement of +3.9percentage points compared to three months ago.

③    U.S. long-term interest rates declined, narrowing the interest rate differential between Japan and the U.S. from 2.29 to 2.21. Consequently, the dollar-yen exchange rate moved toward yen appreciation within the range of the 157-yen level to the 155-yen level. The dollar index fell by -0.72% for the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The third week of November likely saw net selling, while the fourth week likely saw net buying. This week is expected to see net buying. Last week, out of the five points, ① was the bullish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 7.1 percentage points (equivalent to approximately ¥3720 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.5 percentage points (equivalent to approximately ¥6780 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is stronger than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 16.4 on a weekly basis. The Nikkei VI fell to 27.6 on a weekly basis. The U.S. market is in a “slightly optimistic” state, while the Japanese market is in a state of “moodiness.”.

 

The Nikkei average is above the 9-day and 25-day moving averages. A green light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +30.0%, while the deviation rate from the 200-day moving average is +22.1%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is above the 9-day line and 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the 9-day line and 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘green light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 154 and 156 yen per dollar range.

 

This week in the U.S. markets, investors await delayed economic indicators and new private surveys. Among these, the Personal Consumption Expenditures (PCE) Deflator, ISM Manufacturing and Non-Manufacturing Indexes, November ADP Employment Report, and the University of Michigan Consumer Sentiment Index will be closely watched. Globally, Australia and Brazil's third-quarter GDP figures and the eurozone inflation rate are scheduled for release.

 

This week's projected range for the Nikkei average is expected to move between the upper Bollinger Band +1σ (currently around ¥51,250) and the lower Bollinger Band -1σ (currently around ¥49,210).

             

This week, the Nikkei average is likely to remain firm if expectations for further Fed rate cuts persist in the U.S. market.

Outlook for the Nikkei average this week [24 November 2025]

 [Fundamental viewpoint]

Last week on the US markets, share indices fell over the week as concerns over the high valuations of AI-related stocks and diminishing expectations for further interest rate cuts by the Federal Reserve took hold.

Weekly change rate: NY Dow: -1.91%, NASDAQ: -2.74%, S&P 500: -1.95%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.57 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 22.4 and the Nikkei 225's P/E ratio of 18.1 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.57 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 25.2 Or, the Nikkei 225 will be around 67,800 yen.

As a result, the Japanese market is undervalued by about 19,800 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately 19,800 yen less attractive than the US market. Last week, the weakness in the Japanese market diminished.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was negative last week. The daily is above the 200-day line and within the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is above the 200-day line and within the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 200-day line.

②    Following the announcement of financial results, the projected ROE for Nikkei 225 constituent companies stands at +8.9%. This remains unchanged from three months ago. The profit growth rate is -3.4%, representing an improvement of +3.1 percentage points compared to three months ago.

③    US long-term interest rates declined, and although the interest rate differential between Japan and the US narrowed from 2.45 to 2.29, the dollar-yen exchange rate moved in a yen-weakening direction within the range of 154 to 157 yen. The dollar index rose by +0.93% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The second week of November saw net buying, while the third week likely saw net selling; net selling is anticipated this week. Last week, out of five points, ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 8.7 percentage points (equivalent to approximately ¥4230 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.4 percentage points (equivalent to approximately ¥6520 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 23.5 over the week. The Nikkei VI rose to 37.3 over the week. The US market is in a state of ‘mood of suspicion’, while the Japanese market is in a state of ‘fear’.

 

The Nikkei average is below the 9-day and 25-day moving averages. A red light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +21.3%, while the deviation rate from the 200-day moving average is +18.8%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is below the 9-day line and 25-day and above 200-day lines. It is within the clouds of the Ichimoku chart.

The NASDAQ is below the 9-day line and 25-day and above 200-day lines. It is above the clouds within the Ichimoku Chart.

It is a ‘red light’ in the short term and a ‘yellow light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term no trend and a short-term down trend. The Japanese market is in a medium-term up trend, and the short-term is down trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 155 and 157 yen per dollar range.

 

This week in the US market, government agencies are set to continue releasing data delayed by the federal shutdown. Key releases include the Producer Price Index, Retail Sales, and Durable Goods Orders. Major housing price indicators are also scheduled for release. Meanwhile, globally, the UK Budget, inflation rates across EU nations, and consumer confidence indices are among the data releases planned.

 

Last week, the Nikkei average fell below the projected range. The upper limit was around 670 yen, while the lower limit dipped below 510 yen.

This week, the Nikkei average is expected to move within a projected range: the upper limit at the 25-day moving average (currently around 50,100 yen) and the lower limit at the Bollinger Band -2σ (currently around 47,820 yen).

             

This week, the Nikkei average is likely to remain subdued unless concerns over the high valuations of Japanese and US AI-related stocks and the retreating prospects of further interest rate cuts by the Federal Reserve are dispelled.

Outlook for the Nikkei average this week [16 November 2025]

 [Fundamental viewpoint]

Last week on the US markets, stocks that had been lagging behind saw buying interest, while concerns over the high valuations of AI-related shares and diminishing expectations for further interest rate cuts by the Federal Reserve contributed to mixed weekly performance for the stock indices.

Weekly percentage change: NY Dow: +0.34%, NASDAQ: -0.45%, S&P 500: +0.08%..

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.61 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.1 and the Nikkei 225's P/E ratio of 18.9 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.61 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.2 Or, the Nikkei 225 will be around 72,410 yen.

As a result, the Japanese market is undervalued by about 22,030 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately 22,030 yen less attractive than the US market. Last week, the weakness in the Japanese market eased somewhat.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was negative last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

②    Following the announcement of financial results, the projected ROE for Nikkei 225 constituent companies stands at +8.8%. This remains unchanged from three months ago. The profit growth rate is -4.2%, representing an improvement of +2.2 percentage points compared to three months ago.

③    US long-term interest rates rose, widening the interest rate differential between Japan and the US from 2.43 to 2.45. Consequently, the dollar-yen exchange rate moved within the range of 153 to 155 yen, trending towards a weaker dollar. The dollar index declined by -0.28% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The first week of November saw net selling, the second week of November was likely to have seen net selling, and net selling is expected this week. Last week, out of the five points, ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 10.3 percentage points (equivalent to approximately ¥5190 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 19.1 percentage points (equivalent to approximately ¥8160 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 19.6 on a weekly basis. The Nikkei VI fell to 31.2 on a weekly basis. The US market is in a state of ‘mood of suspicion’, while the Japanese market is in a state of ‘acrophobia’.

 

The Nikkei average is below the 9-day and above 25-day moving averages. A yellow light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +35.4%, while the deviation rate from the 200-day moving average is +23.8%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is below the 9-day line and above 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is below the 9-day line and 25-day and above 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘yellow light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 153 and 156 yen per dollar range.

 

This week in the US markets, following the end of the prolonged government shutdown, key private indicators to watch include the S&P Flash PMI, existing home sales, the housing market index, and the ADP weekly employment report. Markets will also focus on NVIDIA's earnings as fresh material for assessing the overheating sentiment in AI-related stocks, and on the results from Walmart, Target, and Home Depot to gain insights into consumer purchasing power. On the monetary policy front, the FOMC minutes will be closely watched. Globally, PMIs for the eurozone, UK, and Japan will be released, along with Japan's third-quarter GDP and October consumer price index (CPI).

 

Last week, the Nikkei average exceeded the anticipated range. The upper limit surpassed the projected level by ¥560, while the lower limit exceeded it by ¥1,830.

This week, the Nikkei average is expected to move within a projected range: the upper limit at the Bollinger Band +1σ (currently around ¥51,260) and the lower limit at the Bollinger Band -1σ (currently around ¥48,420).

             

This week, the Nikkei average is likely to remain subdued unless concerns over the high valuations of Japanese and US AI-related stocks and the retreating prospects of further interest rate cuts by the Federal Reserve are dispelled.

Outlook for the Nikkei average this week [9 November 2025]

 [Fundamental viewpoint]

Last week on the US markets, share indices declined over the week as concerns grew over the high valuations of AI-related stocks and the partial US government shutdown began to impact employment negatively.

Weekly change  NY Dow: -1.21%, NASDAQ: -3.04%, S&P 500: -1.63%..

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.63 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.5 and the Nikkei 225's P/E ratio of 18.9 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.63 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.5 Or, the Nikkei 225 will be around 72,840 yen.

As a result, the Japanese market is undervalued by about 22,570 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately 22,570 yen less attractive than the US market. Last week, the weakness in the Japanese market intensified.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

②    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.7%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.3%. This is a deterioration of -1.5 percentage points compared to three months ago.

③    US long-term interest rates rose, widening the interest rate differential between Japan and the US from 2.42 to 2.43. Nevertheless, the dollar-yen exchange rate moved in a yen-appreciation direction, fluctuating within the range of the 154-yen level to the 152-yen level. The dollar index declined by -0.16% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The fifth week of October saw net buying, the first week of November likely saw net buying, and net buying is anticipated this week. Last week, out of the five points, ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 9.9 percentage points (equivalent to approximately ¥4980 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 17.4 percentage points (equivalent to approximately ¥8750 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 19.1 on a weekly basis. The Nikkei VI rose to 35.5 on a weekly basis. The US market is in a state of ‘mood of suspicion’, while the Japanese market is in a state of ‘acrophobia’.

 

The Nikkei average is below the 9-day and above 25-day moving averages. A yellow light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +39.0%, while the deviation rate from the 200-day moving average is +24.5%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is below the 9-day line and above 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is below the 9-day line and 25-day and above 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘yellow light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 154 and 151 yen per dollar range.

 

This week in the US markets, the government shutdown has reached a record length, with the suspension of US economic indicator releases expected to persist. Private sector economic indicators, such as the weekly ADP employment report, will take centre stage. Globally, the UK will release GDP and labour market indicators, the eurozone will publish industrial production figures, China will report industrial production and retail sales, and Japan will release its preliminary GDP figures.

 

Last week, the Nikkei average fell below the projected range. The upper limit remained largely unchanged, while the lower limit dipped below ¥1,560.

This week's projected range for the Nikkei average is expected to move between the upper Bollinger Band +1σ (currently around ¥50,820) and the lower Bollinger Band -1σ (currently around ¥47,240).

             

This week, the Nikkei average is likely to remain subdued unless concerns over the high valuations of AI-related stocks in Japan and the US are dispelled.

Outlook for the Nikkei average this week [3 November 2025]

 [Fundamental viewpoint]

Last week on the US markets, share indices rose over the week as concerns over excessive investment in the AI sector simmered, while caution over US-China trade friction receded and expectations grew for an interest rate cut in October.

Weekly change rate: NY Dow: +0.75%, NASDAQ: +2.24%, S&P 500: +0.71%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.45 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.3 and the Nikkei 225's P/E ratio of 19.5 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.45 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.2 Or, the Nikkei 225 will be around 73,070 yen.

As a result, the Japanese market is undervalued by about 20,660 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately 20,660 yen less attractive than the US market. Last week, the weakness in the Japanese market intensified.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

②    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.7%. This is a deterioration of 0.1 percentage points compared to three months ago. Profit growth was -7.9%. This is a deterioration of 3.5 percentage points compared to three months ago.

③    US long-term interest rates rose, widening the interest rate differential between Japan and the US from 2.35 to 2.42. Consequently, the dollar-yen exchange rate moved in a yen-weakening direction within the range of 151 to 154 yen per dollar. The dollar index rose by +0.79% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The fourth week of October saw net buying, the fifth week of October likely saw net buying, and net buying is anticipated this week. Last week, out of the five points, ①, ③ and ⑤ were bullish factors.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 11.8 percentage points (equivalent to approximately ¥6180 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 21.6 percentage points (equivalent to approximately ¥11320 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is performing more strongly than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, rose to 17.4 over the week. The Nikkei VI rose to 28.2 over the week. The US market is in an “optimistic” state, while the Japanese market is in a state of “mood of suspicion”.

 

The Nikkei average is above both the 9-day and 25-day moving averages. A green light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +57.7%, while the deviation rate from the 200-day moving average is +30.5%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is above the 9-day line and 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the 9-day line and 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘green light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 152 and 155 yen per dollar range.

 

This week in the US markets, despite the government shutdown entering its second month and delays in government data releases, key indicators such as the ADP employment report, the ISM Purchasing Managers' Index, and the University of Michigan Consumer Sentiment Index will be closely watched. Earnings reports are scheduled from companies including Palantir, AMD, Berkshire Hathaway, McDonald's, and Qualcomm. Globally, China's PMI and trade balance figures are due, while central banks including the Bank of England and the Reserve Bank of Australia will announce their policy interest rate decisions.

 

Last week, the Nikkei average slightly exceeded the anticipated range. The upper limit surpassed the forecast by ¥50, while the lower limit exceeded it by ¥2,660.

This week's projected range for the Nikkei average is expected to move between an upper limit of the Bollinger Band +2σ (currently around ¥52,360) and a lower limit of the Bollinger Band +1σ (currently around ¥50,240).

             

This week, the Nikkei average is likely to maintain its upward trend provided that strong earnings reports continue to be released by semiconductor-related companies in Japan and the US.

Outlook for the Nikkei average this week [26 October 2025]

 [Fundamental viewpoint]

Last week on the US markets, stock indices rose over the week as concerns over US-China trade friction eased for the time being, alongside strong corporate earnings and expectations of an interest rate cut in October.

Weekly change rate: NY Dow: +2.20%, NASDAQ: +2.31%, S&P 500: +1.92%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.40 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 22.8 and the Nikkei 225's P/E ratio of 19.1 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.40 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 26.1 Or, the Nikkei 225 will be around 67,340 yen.

As a result, the Japanese market is undervalued by about 18,040 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥18,040 less attractive than the US market. Last week, the weakness in the Japanese market diminished.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2026 GDP estimate (now +2.5%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can keep above the 25-day line.

②    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.5%. This is a deterioration of 2.5 percentage points compared to three months ago.

③    US long-term interest rates declined, and although the interest rate differential between Japan and the US narrowed from 2.39 to 2.35, the dollar-yen exchange rate moved in a yen-weakening direction within the range of the 150-yen to 153-yen levels. The dollar index rose by +0.40% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The third week of October saw net buying, the fourth week likely saw net buying, and net buying is anticipated this week. Last week, points ① and ③ were bullish factors out of the five points. This week, points ①, ②, ③ and ⑤ are expected to have an impact.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 5.5 percentage points (equivalent to approximately ¥2620 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.9 percentage points (equivalent to approximately ¥6610 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is performing more strongly than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, fell to 16.4 on a weekly basis. The Nikkei VI also declined to 25.4 on a weekly basis. The US market is in an “optimistic” state, while the Japanese market is in a state of “mood of suspicion”.

 

The Nikkei average is above both the 9-day and 25-day moving averages. A green light is flashing for the short-term trend.

The Nikkei average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate stands at +41.8%, while the deviation rate from the 200-day moving average is +23.6%. With all three factors positive, a green light is flashing for the medium-term trend.

 

In the US market, the NY Dow is above the 9-day line and 25-day and 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is above the 9-day line and 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘green light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term up trend. The Japanese market is in a medium-term up trend, and the short-term is up trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 151 and 154 yen per dollar range.

 

This week in the US markets, the FOMC meeting - taking place without the usual data due to the government shutdown - will be the main focus. With uncertainty surrounding US economic indicators due to the shutdown, attention is likely to shift to key earnings announcements from companies such as Microsoft, Apple, Alphabet, Meta, Amazon, UnitedHealth, and ExxonMobil. The meeting between President Trump and Chinese President Xi Jinping will also draw significant attention. Globally, policy rate decisions from the ECB and the Bank of Japan, GDP statistics and inflation rates from Eurozone member states, and China's PMI data are scheduled for release.

 

Last week, the Nikkei average traded within the expected range. The upper limit fell short by 60 yen, while the lower limit exceeded it by 610 yen.

This week, the Nikkei average is expected to move within a range defined by the upper limit at the Bollinger Band +2σ (currently around 50,240 yen) and the lower limit at the 25-day moving average (currently around 46,970 yen).

             

This week's Nikkei average is expected to see volatile movements, influenced by the Federal Reserve and Bank of Japan's policy rate decisions and the future direction of monetary policy.

Outlook for the Nikkei average this week [19 October 2025]

 [Fundamental viewpoint]

Last week on US markets, although there were periods of decline amid concerns over US-China trade tensions and regional bank credit worries, caution eased for the time being following President Trump's remarks and resilient regional bank earnings reports. Consequently, stock indices rose over the week.

Weekly change rate: NY Dow: +1.56%, NASDAQ: +2.14%, S&P 500: +1.70%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns about a prolonged conflict in Ukraine, tariff policies of the U.S. administration, financial instability and global economic slowdown due to rising interest rates, and the collapse of the real estate bubble and economic slowdown in China. This also raises concerns about the arrival of stagflation. Furthermore, geopolitical risks in East Asia and the Middle East continue to require attention..

The difference in the yield spread between the Japanese and U.S. markets is 1.76 points undervalued for the Japanese market when the OECD's nominal GDP forecast for 2026 is taken into account. The reason for the undervaluation is the difference between the S&P 500's P/E ratio of 23.0 and the Nikkei 225's P/E ratio of 18.3 the difference between the U.S. and Japanese interest rates, and the difference in GDP growth rates.

In order for the U.S. and Japanese markets to be in equilibrium, the following conditions must be met.

The difference in GDP growth between Japan and the U.S. in 2026 relative to the current price of the Nikkei 225 will be 1.76 percentage points larger than the OECD forecast. (Japan is revised downward or the U.S. is revised upward). Or the current year's forecast PER for stocks in the Nikkei Stock Average becomes about 27.0 Or, the Nikkei 225 will be around 70,230 yen.

As a result, the Japanese market is undervalued by about 22,650 yen in the medium to long term.

 

From a fundamental perspective, the Japanese market could be said to be approximately ¥22,650 less attractive than the US market. Last week, the weakness in the Japanese market intensified.

 

[Conditions for Nikkei average rise]

In the future, the following assumptions are necessary for the Nikkei average to rise further.

①    Rising US market

②　Increase in profit forecast for the current fiscal year above the previous year's level

③ Further depreciation of the yen due to the widening interest rate gap between Japan and the U.S.

④ Upward revision of Japan's 2025 GDP estimate (now +3.3%) by OECD

⑤ Foreign investors over-buying

 

Looking at recent movements

①    The weekly leg of the NYDow was positive last week. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is above the 200-day line and above the clouds on the Ichimoku Chart. This week, the focus will be on whether the NY Dow can return above the 25-day line.

②    As a result of the financial results announcement, the ROE forecast for Nikkei 225 stocks was +8.9%. This is a deterioration of 0.2 percentage points compared to three months ago. Profit growth was -6.9%. This is a deterioration of 3.6 percentage points compared to three months ago.

③    Although US long-term interest rates declined, the interest rate differential between Japan and the US widened from 2.36 to 2.39. Consequently, the dollar-yen exchange rate moved towards a stronger yen, fluctuating within the range of 152 to 149 yen per dollar. The dollar index fell by -0.32% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +2.5% for Japan and +4.3% for the U.S., so the Japanese market is 1.8 percentage points inferior in this aspect.

⑤    The second week of October saw net buying, the third week of October likely saw net buying, and net buying is expected this week. Last week, out of the five points, ⑤ was the bullish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 5.5 percentage points (equivalent to approximately ¥2620 for the Nikkei average) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Conversely, it is overvalued by 13.9 percentage points (equivalent to approximately ¥6610 for the Nikkei average) relative to the NY Dow's 200-day moving average deviation rate over the same timeframe.

 

The Japanese market is showing greater strength than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the US market, fell to 20.8 on a weekly basis. The Nikkei VI rose to 35.5 on a weekly basis. The US market is in a state of “mood of suspicion”, while the Japanese market is in a state of “height phobia”.

 

The Nikkei 225 is below the 9-day line and above the 25-day line. The short-term trend is now showing a “green signal.

The Nikkei 225 is above the Ichimoku Kinko's Kumo (equilibrium) cloud. The overall divergence was +34.2%, while the 200-day moving average divergence was +20.1%. As all three factors are positive, the medium-term trend has a "green light".

 

In the US market, the NY Dow is below the 9-day line and 25-day and above 200-day lines. It is above the clouds of the Ichimoku chart.

The NASDAQ is below the 9-day line and above 25-day and 200-day lines. It is above the clouds above the Ichimoku Chart.

It is a ‘yellow light’ in the short term and a ‘green light’ in the medium term.

 

[Outlook for this week]

Looking at the US market from a fundamental perspective, concerns about an economic downturn remain in the short term. Other risk factors include inflation and rising interest rates due to the Russia-Ukraine war, recession due to energy shortages and deteriorating political conditions in the EU bloc, US-China trade friction, financial market turmoil caused by the bursting of China's property bubble and credit crunch, and expanding geopolitical risks in the Middle East.

 

Looking at the technical aspects, the U.S. market is in a medium-term up trend and a short-term no trend. The Japanese market is in a medium-term up trend, and the short-term is no trend.

 

Analysis of the foreign exchange market indicates that the yen has shifted towards depreciation, with the low of 139 yen reached in April 2025 marking the bottom. This week, the yen is expected to trade between the 149 and 152 yen per dollar range.

 

This week in the US markets, investors will continue to monitor developments in the US-China trade dispute. The US corporate earnings season is also in full swing, with major companies such as Tesla, P&G, GE, Coca-Cola, Netflix, IBM, AT&T, Verizon and Intel scheduled to report their results. The US federal government shutdown is expected to enter its fourth week, though traders will also focus on the Consumer Price Index (CPI), S&P Global PMI, and existing home sales figures. Globally, releases include China's third-quarter GDP, retail sales, industrial production, PMIs for the Eurozone, Germany, and the UK, alongside Japan's PMI, trade statistics, and price data.

 

Last week, the Nikkei average significantly exceeded its projected range. The upper limit surpassed 950 yen, while the lower limit exceeded 4,040 yen.

This week, the Nikkei average is projected to move within a range defined by the upper limit at the Bollinger Band +2σ (currently around 48,930 yen) and the lower limit at the 25-day moving average (currently around 46,050 yen).

             

This week's Nikkei average is expected to be influenced more by movements in the US market—such as US-China trade friction, the US government shutdown, and concerns over regional bank credit—than by domestic factors. Until this uncertainty dissipates, the upward momentum is likely to be dampened.