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Japans Nikkei Seen Rallying Beyond 30,000, With or Without BOJ

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TOKYO, Feb 10 Reuters Japans Nikkei stock average looks set to extend its rally beyond the psychological barrier of 30,000 for the first time in three decades, analysts say, even without the help of the central banks massive fundbuying programme.

The benchmark index has soared almost 30 since November, outperforming peers in North America and Europe, as foreign investors ride on a wave of central bank cash, hoping to capitalise on an anticipated global rebound from the COVID19 pandemic this year.

Japans longneglected stock market has suddenly found itself the darling of whats come to be known as the reflation trade, with its abundance of cyclical shares, such as electronic parts makers, that tend to do well in the early stages of a recovery in global trade.

As long as the recovery plays out according to script, the Nikkei is poised to test 31,800 this year, says John Vail, chief global strategist at Nikko Asset Management in Tokyo. That target would mean gains of around 8 from current levels.

Japan is in a sweet spot, he said.

Even the huge cash piles that Japan Inc. has been roundly criticised for have come to be viewed as a virtue since the pandemic, because strong balance sheets mean steadier dividends.

The mood is getting so bullish that few analysts now worry that a scaling back of central bank support will derail the rally as long as its communicated carefully enough to avoid a taper tantrumstyle panic.

The Bank of Japans programme to buy up to 12…

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