Strong fundamentals pushed the Nikkei to fresh 15-year highs in recent sessions, leading some analysts to raise their targets amid expectations that upside momentum will continue amid strong fund flows.
Most Asian stocks rose Thursday, with the regional benchmarks poised for its biggest monthly advance since September 2013, as health-care and consumer shares climbed.
About three shares rose for every two that fell on the MSCI Asia Pacific Index, on track for a 4.3 percent gain this month and a 0.9 percent weekly advance after Greece and its creditors this week brokered a deal to extend bailout funding for four months and Federal Reserve Chair Janet Yellen damped concerns of an imminent rate increase.
“The market has been performing largely with the help of the Fed the last couple of years,” Scott Wren, a senior equity strategist who helps oversee $1.4 trillion at Wells Fargo Advisors LLC, said on Bloomberg Television. “Valuations aren’t stretched at this point. We have more upside.”
The regional benchmark index traded at 14.6 times estimated earnings at the last close, the highest since March 2013, according to data compiled by Bloomberg. That compares with 17.8 times for the Standard & Poor’s 500 Index.
Japan’s Topix index added 0.3 percent as the yen traded at 119.27 to the dollar, extending losses after falling 0.5 percent yesterday. Japan’s industrial output rose 4 percent in January from the month before, beating estimates for a 2.7 percent rise forecast by analysts. Core consumer prices rose 2.2 percent in January from a year earlier, compared with estimates for a 2.3 percent increase.