Outlook for the Nikkei average this week [19 April 2026]

 [Fundamental viewpoint]

Last week, U.S. stock indices rose on expectations of renewed negotiations aimed at ending hostilities between the U.S. and Iran.

Weekly percentage change: Dow Jones: +3.19%, NASDAQ: +6.84%, S&P 500: +4.54%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.59 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 21.6 and the Nikkei 225's P/E ratio of 20.5 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 0.59 prcentage 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 23.4 Or, the Nikkei 225 will be around 66,510 yen.

As a result, the Japanese market is undervalued by about 66,510 yen in the medium to long term.

 

From a fundamental perspective, one could say that the Japanese market is about 8,030 yen less attractive than the U.S. 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 the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is a above the 200-day line and the clouds on the Ichimoku Chart. This week, the focus will be on whether the NYDow can keep above the 200-day line.

②    Following the release of earnings results, the projected ROE for Nikkei 225 constituent stocks stood at +8.9%. This represents a decline of 0.1 percentage points compared to three months ago. The projected profit growth rate was -1.7%, an improvement of 1.3 percentage points compared to three months ago.

③    Long-term U.S. interest rates fell, narrowing the interest rate differential between Japan and the U.S. from 1.90 to 1.85, and the dollar-yen exchange rate moved toward a stronger yen, fluctuating between the 159 and 157 yen ranges. The Dollar Index fell by 0.48% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.7% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    Net buying was recorded in the second week of April, and it is highly likely that net buying also occurred in the third week of April; net buying is expected this week. Last week, out of the five factors, factor ① was a bullish indicator.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 11.3 percentage points (equivalent to approximately ¥6,610 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 14.6 percentage points (equivalent to approximately ¥8,540 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 17.5 for the week. The Nikkei VI fell to 28.4 for the week. The U.S. market is in an “optimistic” state, while the Japanese market is in a “fearful” state.

 

The Nikkei Average is above the 9-day and 25-day moving averages. A “green light” is lit for the short-term trend.

The Nikkei Average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +34.3%, and the deviation rate from the 200-day moving average is +19.7%. With three factors positive, a “green light” is lit 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 the above 9-day line and 25-day and 200-day lines. It is above the clouds the Ichimoku Chart.

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

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 159 and 156 yen per dollar range.

 

In the U.S. markets this week, the possibility of a resolution to the conflict between Iran and the U.S. will continue to influence market movements. Additionally, earnings reports are scheduled from companies such as Tesla, Intel, UnitedHealth, American Express, and P&G. On the economic front, retail sales and the S&P PMI will also be in the spotlight. Globally, PMI and business sentiment indices from various European countries will be released, along with UK inflation and retail sales figures, the People’s Bank of China’s interest rate decision, and Japan’s trade statistics and inflation rate.

 

Last week, the Nikkei 225 closed above the expected range. The high was 1,090 yen above the upper limit, and the low was 2,410 yen above the lower limit.

This week, the Nikkei 225 is expected to trade within a range defined by the upper limit at the +2σ Bollinger Band (currently around 59,060 yen) and the lower limit at the +1σ Bollinger Band (currently 56,790 yen).

                           

This week, the Nikkei Average is likely to continue being swayed by the outcome of the conflict between Iran and the U.S. and by crude oil prices. However, if the ceasefire between the U.S. and Iran holds, the index is expected to move within the range between the +2σ and +1σ lines of the Bollinger Bands.

Outlook for the Nikkei average this week [12 April 2026]

 [Fundamental viewpoint]

Last week, U.S. stock indices rose as the U.S. and Iran agreed to an immediate two-week ceasefire and the reopening of the Strait of Hormuz.

Weekly percentage change: Dow Jones: +3.04%, NASDAQ: +4.64%, S&P 500: +3.56%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.45 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 21.0 and the Nikkei 225's P/E ratio of 20.8 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 0.45 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 22.9 Or, the Nikkei 225 will be around 62,850 yen.

As a result, the Japanese market is undervalued by about 5,920 yen in the medium to long term.

 

From a fundamental perspective, one could say that the Japanese market is about 5,920 yen less attractive than the U.S. market. Last week, the weakness in the Japanese market narrowed.

 

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

②    Following the release of earnings results, the projected ROE for Nikkei 225 constituent stocks stood at +8.9%. This represents a decline of 0.1 percentage points compared to three months ago. The projected profit growth rate was -2.1%, an improvement of 1.2 percentage points compared to three months ago.

③    Long-term U.S. interest rates fell, narrowing the interest rate differential between Japan and the U.S. from 1.97 to 1.90, and the dollar-yen exchange rate moved toward a stronger yen, fluctuating between the 160-yen and 157-yen ranges. The Dollar Index fell by 1.49% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.7% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

Net buying was recorded in the first week of April, and it is highly likely that net buying also occurred in the second week of April; net buying is expected this week. Last week, out of the five points, point ① was a bullish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 15.8 percentage points (equivalent to approximately ¥8,990 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 15.6 percentage points (equivalent to approximately ¥8,880 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 19.2 for the week. The Nikkei VI rose to 32.6 for the week. The U.S. market is in a state of “fear,” while the Japanese market is in a state of “extreme fear.”

 

The Nikkei Average is above the 9-day and 25-day moving averages. A “green light” is lit for the short-term trend.

The Nikkei Average is aboe the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +29.1%, and the deviation rate from the 200-day moving average is +17.7%. With three factors positive, a “green light” is lit 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 below the clouds of the Ichimoku chart.

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

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

Looking at the technical aspects, the U.S. market is in a medium-term no 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 159 and 156 yen per dollar range.

 

In the U.S. markets this week, the outcome of ceasefire negotiations regarding the war in the Middle East remains the primary focus. On the economic front, attention will be on the Producer Price Index, the New York Fed Manufacturing Survey, and the Industrial Production Index. Additionally, major financial institutions will release their earnings reports. Globally, economic indicators such as EU trade statistics, industrial production, China’s GDP, trade statistics, industrial production, retail sales, unemployment rate, and housing prices will be released.

 

The Nikkei 225 is expected to trade this week within a range bounded by the upper limit of the +2σ Bollinger Band (currently around 56,640 yen) and the lower limit of the 25-day moving average (currently 53,790 yen).

                           

This week, the Nikkei Average is likely to remain volatile, driven by the unfolding situation in the Persian Gulf and oil prices; however, if the ceasefire between the U.S. and Iran holds, the index is expected to trade along the +2σ line of the Bollinger Bands.

Outlook for the Nikkei average this week [5 April 2026]

 [Fundamental viewpoint]

Last week, U.S. stock indices rose on expectations that the military conflict in the Middle East would come to an end.

Weekly percentage change: Dow Jones: +2.96%, NASDAQ: +4.44%, S&P 500: +3.36%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.58 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 20.3 and the Nikkei 225's P/E ratio of 19.9 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 0.58 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 22.5 Or, the Nikkei 225 will be around 60,010 yen.

As a result, the Japanese market is undervalued by about 6,890 yen in the medium to long term.

 

From a fundamental perspective, one could say that the Japanese market is about 6,890 yen less attractive than the U.S. market. Last week, the weakness in the Japanese market narrowed.

 

[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 below the 200-day line and the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was positive. The daily is a below the 200-day line and the clouds on the Ichimoku Chart. This week, the focus will be on whether the NYDow can return above the 200-day line.

②    Based on the earnings announcements, the projected ROE for Nikkei 225 constituent stocks stands at +8.8%. This is unchanged from three months ago. The projected profit growth rate is -1.6%, an improvement of 1.5 percentage points compared to three months ago.

③    Long-term U.S. interest rates fell, narrowing the interest rate differential between Japan and the U.S. from 2.08 to 1.97. As a result, the dollar-yen exchange rate moved toward a stronger yen, fluctuating between the 160 and 158 yen ranges. The Dollar Index fell by 0.01% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.7% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    The fourth week of March saw a net sell position, and it is highly likely that the first week of April also saw a net sell position; a net sell position is expected this week. Last week, out of the five factors, factor ① was a bullish indicator, while factor ③ was a bearish indicator.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 13.2 percentage points (equivalent to approximately ¥7,010 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 11.0 percentage points (equivalent to approximately ¥5,840 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 23.9 for the week. The Nikkei VI fell to 27.2 for the week. The U.S. market is in a state of “extreme fear,” and the Japanese market is also in a state of “extreme fear.”

The Nikkei Average is above the 9-day and below 25-day moving averages. A “yellow light” is lit for the short-term trend.

The Nikkei Average is below the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +8.2%, and the deviation rate from the 200-day moving average is +10.8%. With two factors positive, a “yellow light” is lit for the medium-term trend.

 

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

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

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

Looking at the technical aspects, the U.S. market is in a medium-term down trend and a short-term no trend. The Japanese market is in a medium-term no 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 160 and 158 yen per dollar range.

 

In the U.S. markets this week, developments in the Middle East are likely to remain the primary driver of market volatility. On the economic front, attention will focus on the FOMC minutes, CPI data, the ISM Services PMI, the University of Michigan Consumer Sentiment Index (flash estimate), and PCE (Personal Consumption Expenditures). Globally, China’s CPI and Germany’s manufacturing orders are scheduled for release.

 

Last week, the Nikkei 225 closed above the expected range. The high exceeded 19,800 yen, and the low exceeded 19,900 yen.

This week, the Nikkei 225 is expected to trade within a range defined by the 25-day moving average (currently around 54,060 yen) on the upside and the -2σ Bollinger Band (currently 50,470 yen) on the downside.

                           

This week, the Nikkei Average is likely to continue being swayed by developments in the war in the Persian Gulf and crude oil prices. Unless crude oil prices stabilize, the market is expected to remain dominated by selling pressure.

Outlook for the Nikkei average this week [29 March 2026]

 [Fundamental viewpoint]

Last week, U.S. markets saw stock indices decline for the week as crude oil prices surged again amid concerns that military conflict in the Middle East could intensify and drag on.

Weekly percentage change: Dow Jones: -0.90%, NASDAQ: -3.23%, S&P 500: -2.12%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.76 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 20.4 and the Nikkei 225's P/E ratio of 19.6 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 0.76 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 23.1 Or, the Nikkei 225 will be around 62,740 yen.

As a result, the Japanese market is undervalued by about 9,370 yen in the medium to long term.

 

From a fundamental perspective, one could say that the Japanese market is about 9,370 yen less attractive than the U.S. market. Last week, the weakness in the Japanese market narrowed.

 

[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 below the 200-day line and the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is a below the 200-day line and the clouds on the Ichimoku Chart. This week, the focus will be on whether the NYDow can return above the 200-day line.

②    Following the release of earnings results, the projected ROE for Nikkei 225 constituent stocks stood at +8.8%. This represents a decline of 0.1 percentage points compared to three months ago. The projected profit growth rate was -1.8%, an improvement of 1.3 percentage points compared to three months ago.

③    Although U.S. long-term interest rates rose and the interest rate differential between Japan and the U.S. narrowed from 2.12 to 2.04, the dollar-yen exchange rate moved toward a weaker yen, fluctuating between the 158 and 160 yen ranges. The Dollar Index rose 0.69% for the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.7% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    The third week of March saw net selling, and it is highly likely that the fourth week of March also saw net selling; net selling is expected this week. Last week, out of the five points, point ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 18.6 percentage points (equivalent to approximately ¥9,930 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 15.6 percentage points (equivalent to approximately ¥8,330 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, rose to 31.0 for the week. The Nikkei VI fell to 33.3 for the week. The U.S. market is in a state of “extreme fear,” and the Japanese market is also in a state of “extreme fear.”

The Nikkei Average is below the 9-day and 25-day moving averages. A “red light” is lit for the short-term trend.

The Nikkei Average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +8.8%, and the deviation rate from the 200-day moving average is +12.2%. With two factors positive, a “yellow light” is lit for the medium-term trend.

 

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

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

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

Looking at the technical aspects, the U.S. market is in a medium-term down trend and a short-term down trend. The Japanese market is in a medium-term no 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 159 and 161 yen per dollar range.

 

In the U.S. markets this week, the situation in the Middle East is likely to remain the primary driver of market volatility. Among economic indicators, the jobs report will be the main focus. Additionally, the ISM Manufacturing PMI is expected to provide insights into the impact of rising energy costs. Globally, key releases include the eurozone inflation rate, China’s PMI, and the Bank of Japan’s monetary policy decision.

 

Last week, the Nikkei Average traded above the expected range. The upper limit was exceeded by 980 yen, and the lower limit by 860 yen.

This week, the Nikkei Average is expected to move within a range defined by the upper limit at the -1σ Bollinger Band (currently around 53,050 yen) and the lower limit at the -3σ Bollinger Band (currently 48,910 yen).

                           

This week, the Nikkei Average is likely to continue being swayed by developments in the war in the Persian Gulf and crude oil prices. Unless crude oil prices stabilize, the market is expected to remain dominated by selling pressure.

Outlook for the Nikkei average this week [22 March 2026]

 [Fundamental viewpoint]

In the U.S. markets last week, crude oil prices rose sharply amid concerns over the Israeli military’s attack on Iranian gas fields and the possibility of the U.S. military expanding its military operations against Iran, while stock indices declined for the week.

Weekly percentage change: Dow Jones: -2.11%, NASDAQ: -2.07%, S&P 500: -1.90%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.93 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 20.7 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 0.93 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 23.8 Or, the Nikkei 225 will be around 65,170 yen.

As a result, the Japanese market is undervalued by about 11,800 yen in the medium to long term.

 

Fundamentally speaking, the Japanese market is about ¥11,800 less attractive than the U.S. market. Last week, 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 negative last week. The daily is below the 200-day line and the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is a below the 200-day line and the clouds on the Ichimoku Chart. This week, the focus will be on whether the NASDAQ can return above the 200-day line.

②    Following the release of earnings results, the projected ROE for Nikkei 225 constituent stocks stood at +8.8%. This represents a decline of 0.1 percentage points compared to three months ago. The projected profit growth rate was -1.7%, an improvement of 1.4 percentage points compared to three months ago.

③    Long-term U.S. interest rates rose, widening the interest rate differential between Japan and the U.S. from 2.04 to 2.11. As a result, the dollar-yen exchange rate moved slightly toward a stronger yen, fluctuating between the 157 and 159 yen ranges. The Dollar Index fell by 0.99% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.7% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    The second week of March saw net selling, and it is highly likely that the third week of March also saw net selling; net selling is expected this week. Last week, out of the five points, point ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 14.1 percentage points (equivalent to approximately ¥7,590 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 14.9 percentage points (equivalent to approximately ¥8,020 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 26.8 for the week. The Nikkei VI fell to 35.1 for the week. While the U.S. market is in a state of “fear,” the Japanese market is in a state of “extreme fear.”

The Nikkei Average is below the 9-day and 25-day moving averages. A “red light” is lit for the short-term trend.

The Nikkei Average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +8.7%, and the deviation rate from the 200-day moving average is +13.1%. With two factors positive, a “yellow light” is lit for the medium-term trend.

 

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

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

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

Looking at the technical aspects, the U.S. market is in a medium-term down trend and a short-term down trend. The Japanese market is in a medium-term no 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 158 and 161 yen per dollar range.

 

In the U.S. markets this week, the course of the conflict in the Persian Gulf is likely to remain the primary driver of market volatility. On the economic front, the PMI and the University of Michigan Consumer Sentiment Index will be in the spotlight. Globally, key releases include the PMI for the Eurozone, the UK, and Japan; Germany’s business climate index; and Japan’s Consumer Price Index (CPI).

 

Last week, the Nikkei Average temporarily dipped below the expected range. The upper limit was breached by 470 yen, and the lower limit by 990 yen.

This week, the Nikkei Average is expected to move within a range defined by the upper limit at the -1σ Bollinger Band (currently around 54,490 yen) and the lower limit at the -3σ Bollinger Band (currently 51,080 yen).

                           

This week, the Nikkei Average is likely to remain at the mercy of developments in the war in the Persian Gulf and oil prices; unless oil prices stabilize, selling pressure is expected to persist.

Outlook for the Nikkei average this week [15 March 2026]

 [Fundamental viewpoint]

Last week in the U.S. markets, reports that Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, had stated that the blockade of the Strait of Hormuz would continue caused crude oil prices to surge again, leading to a weekly decline in stock indices.

Weekly percentage change: Dow Jones: -1.99%, NASDAQ: -1.26%, S&P 500: -1.60%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.83 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 21.2 and the Nikkei 225's P/E ratio of 19.2 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 0.83 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 22.8 Or, the Nikkei 225 will be around 64,030 yen.

As a result, the Japanese market is undervalued by about 10,210 yen in the medium to long term.

 

Fundamentally speaking, the Japanese market is about ¥10,210 less attractive than the U.S. market. Last week, 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 negative last week. The daily is below the 200-day line and the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is a below the 200-day line and the clouds on the Ichimoku Chart. This week, the focus will be on whether the NASDAQ can return above the 200-day line.

②    Following the earnings announcements, the projected ROE for Nikkei 225 constituents reached +8.7%. This represents a 0.1 percentage point improvement compared to three months ago. The profit growth rate stood at -1.4%, marking a 3.7 percentage point improvement compared to three months ago.

③    Long-term U.S. interest rates rose, widening the interest rate differential between Japan and the U.S. from 1.98 to 2.04. As a result, the dollar-yen exchange rate moved toward a weaker yen, fluctuating between the 157 and 159 yen ranges. The Dollar Index rose by 1.66% over the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.9% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    It is highly likely that there was a net buying position in the first week of March and a net selling position in the second week of March, and a net selling position is expected this week. Last week, out of the five points, point ① was a bearish factor.

 

[Technical viewpoint]

From a technical perspective, the Japanese market is overvalued by 14.1 percentage points (equivalent to approximately ¥7,590 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 14.9 percentage points (equivalent to approximately ¥8,020 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is performing better than the Dow Jones and NASDAQ. The VIX, an indicator of volatility in the U.S. market, fell to 27.2 for the week. The Nikkei VI rose to 45.8 for the week. The U.S. market is in a state of “fear,” while the Japanese market is in a state of “extreme fear.”

The Nikkei Average is below the 9-day and 25-day moving averages. A “red light” is lit for the short-term trend.

The Nikkei Average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +12.2%, and the deviation rate from the 200-day moving average is +14.9%. With all three factors positive, a “green light” is lit for the medium-term trend.

 

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

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

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

 

[Outlook for this week]

In the U.S. market, concerns about an economic downturn driven by the prolonged conflict in the Middle East and high oil prices are likely to be the primary focus for the time being.

 

Looking at the technical aspects, the U.S. market is in a medium-term down 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 158 and 161 yen per dollar range.

 

In the U.S. markets this week, the war in the Middle East and its impact on energy supplies will continue to influence global markets and affect a series of policy rate decisions by major central banks. As for economic indicators, the U.S. Producer Price Index (PPI) and industrial production, the eurozone trade balance, the U.K. unemployment rate, and China’s industrial production, retail sales, and unemployment rate are all scheduled for release.

 

Last week, the Nikkei Average temporarily dipped below the expected range. The upper limit was breached by 470 yen, and the lower limit by 990 yen.

This week, the Nikkei Average is expected to move within a range defined by the upper limit at the -1σ Bollinger Band (currently around 54,490 yen) and the lower limit at the -3σ Bollinger Band (currently 51,080 yen).

                           

The Nikkei Average is likely to remain volatile this week as well, driven by developments in the Middle East and oil prices; however, unless concerns about a prolonged conflict are alleviated, selling pressure is expected to persist.

Outlook for the Nikkei average this week [8 March 2026]

[Fundamental viewpoint]

Last week in the U.S. markets, stock indices fell for the week amid concerns over rising oil prices and the impact on the U.S. economy due to the prolonged military conflict.

Weekly Change Rate: NY Dow: -3.01%, NASDAQ: -1.24%, S&P 500: -2.02%.

                                                                                                 

On the other hand, medium- to long-term risks include concerns over military conflict in the Middle East and the prolonged Ukraine conflict, financial instability and worries about a global economic slowdown stemming from the U.S. administration's tariff policies and rising interest rates, as well as fears of a real estate bubble bursting and China's economic slowdown. Consequently, there are also concerns about the arrival of stagflation. Furthermore, continued attention is required regarding geopolitical risks in Latin America and East Asia.

The difference in the yield spread between the Japanese and U.S. markets is 0.70 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 21.5 and the Nikkei 225's P/E ratio of 19.7 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 0.70 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 22.9 Or, the Nikkei 225 will be around 64,460 yen.

As a result, the Japanese market is undervalued by about 8,840 yen in the medium to long term.

 

Fundamentally speaking, the Japanese market is about ¥8,840 less attractive than the U.S. market. Last week, 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 negative last week. The daily is above the 200-day line and below the clouds on the Ichimoku Chart. The weekly leg of the NASDAQ was negative. The daily is above the 200-day line and below the clouds on the Ichimoku Chart. This week, the focus will be on whether the NASDAQ can return above the 25-day line.

②    Following the earnings announcements, the projected ROE for Nikkei 225 constituents reached +8.9%. This represents a 0.1 percentage point improvement compared to three months ago. The profit growth rate stood at +0.6%, marking a 3.8 percentage point improvement compared to three months ago.

③    U.S. long-term interest rates rose, widening the interest rate differential between Japan and the U.S. from 1.84 to 1.98. The dollar-yen exchange rate moved in a weakening direction for the yen, fluctuating between the 155 and 158 yen range. The dollar index rose +1.24% for the week.

④    The OECD's nominal GDP growth rate for Japan and the U.S. in 2026 is expected to be +3.2% for Japan and +4.9% for the U.S., so the Japanese market is 1.7 percentage points inferior in this aspect.

⑤    The fourth week of February likely saw net buying, while the first week of March likely saw net selling. Net selling is expected 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 19.2 percentage points (equivalent to approximately ¥10,680 for the Nikkei 225) relative to the NASDAQ's 200-day moving average deviation rate on a medium-to-long-term basis. Meanwhile, it is overvalued by 17.5 percentage points (equivalent to approximately ¥9,730 for the Nikkei 225) relative to the NY Dow's 200-day moving average deviation rate on a medium-to-long-term basis.

 

The Japanese market is stronger than the NY Dow and NASDAQ. The VIX, an indicator of volatility in the U.S. market, rose to 29.5 on a weekly basis. The Nikkei VI rose to 41.1 on a weekly basis. The U.S. market is in a state of “fear,” while the Japanese market is in a state of “extreme fear.”

 

The Nikkei Average is below the 9-day and 25-day moving averages. A “red light” is lit for the short-term trend.

The Nikkei Average is above the cloud in the Ichimoku Kinko Hyo chart. The overall deviation rate is +24.4%, and the deviation rate from the 200-day moving average is +19.8%. With all three factors positive, a “green light” is lit 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 below the clouds of the Ichimoku chart.

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

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

 

[Outlook for this week]

In the U.S. market, key immediate concerns include the impact of U.S.-Israel attacks on Iran, the AI agent shock, the frequency of Fed rate cuts this year, the Supreme Court's ruling on the unconstitutionality of Trump tariffs, and the advancement of Donlowism.

 

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 158 and 155 yen per dollar range.

 

This week in U.S. markets, the Middle East conflict triggered a sharp rise in crude oil prices, heightening global inflation expectations. Reports from the IEA and OPEC will shed light on how they view the energy supply shock from the Persian Gulf. On the economic data front, February's Consumer Price Index (CPI) and January's Personal Consumption Expenditures (PCE) will be closely watched. Globally, releases include China's price index, Japan's household spending, Eurozone industrial production statistics, and UK manufacturing output.

 

Last week, the Nikkei average fell significantly below its expected range. The upper limit dipped below ¥1,520, while the lower limit fell below ¥2,330.

This week, the Nikkei average is expected to move within a range defined by the upper limit at the 25-day moving average (currently around ¥56,110) and the lower limit at the Bollinger Band -2σ (currently ¥52,510).

                           

This week, the Nikkei average is likely to remain volatile amid Middle East tensions and oil price fluctuations. Unless concerns about a prolonged conflict are dispelled, selling pressure is expected to persist.