Market Analysis: A sharp rally in Japanese equities faces short-term risks

Analysts believe that in the coming months, the Japanese stock index will be in trouble due to the strengthening of the yen, weak consumer spending, too many investors chasing a small range of stocks, competition from overseas stock markets and domestic political instability. Naka Matsuzawa, chief strategist at Nomura Holdings, expects Japanese stocks to fall around 5% over the next six months, while analysts at JPMorgan Chase & Co. and Saxo Markets expect stock market gains to slow to around 5% to 10% next year, following a more than 20% rise in 2023.