TOKYO - Japan’s investment mood is shifting after the Nikkei Stock Average pushed past 50,000 for the first time and the end of negative interest rates rewrote the rules for households trying to stay ahead of inflation, raising a new question for retail investors: are Japanese equities still undervalued compared with global markets, and what is the most realistic way to grow money without being eroded by rising prices?
In a TBS online program that marked its first distribution of 2026, announcer Minagawa Rena spoke with Koichi Kurose of Listener Asset Management, a market strategist known for his forecasts, about how to use the expanded “New NISA” system, where the growth-investment portion can be deployed in different ways depending on risk tolerance and timing.
Kurose said the Nikkei ended last year just under 50,000 and then climbed quickly in early January, describing a sharp upswing after talk of a possible Lower House dissolution surfaced late on Friday night on January 9th, before the index briefly moved above the 54,000 level. He added that the market later pulled back amid rising geopolitical concerns tied to Greenland, then recovered after President Trump signaled there would be no use of force and indicated he would hold off on raising tariffs on Europe.
The strategist cautioned that political shocks and AI-related developments are likely to remain the two main forces driving markets in 2026, pointing to the risk of a near-term decline after a stronger yen move and weak guidance from Intel’s earnings report, while suggesting that heightened volatility could return as investors reassess U.S. conditions.
For the year ahead, Kurose presented a scenario that peaks at 59,000, with the Nikkei also ending the year at 59,000, arguing that year-end strength is a common statistical pattern when economic conditions are “reasonably good” in both the United States and Japan, but that the outlook could change if the U.S. slips into stagflation. He also said markets could weaken in the autumn, framing September and October as a period when unexpected political moves become more likely ahead of the U.S. midterm election season, and noting the long-standing “October surprise” dynamic.
On how to deploy NISA funds, he said buying early often makes sense because corporate earnings and economic conditions are typically weaker in January than in December, which can translate into lower prices, but he also stressed that investors should expect “the unexpected” and recognize that many people sell during downturns driven by negative headlines. As a result, he argued that committing funds steadily—rather than trying to pinpoint the bottom—can be a rational approach, even if it is not perfect.
The program’s central theme focused on whether AI-linked stocks are in a bubble and, if so, whether that bubble will burst. Kurose argued that AI differs from earlier manias because it is a broad “general-purpose technology” whose label can change as new applications emerge, allowing the theme to “come back” repeatedly even after corrections. He said the earlier “AI” hype cycle faded once before, but returned with the rise of “generative AI,” and he expects future waves to be driven by areas such as “physical AI” in robotics, “factory AI” that monitors production systems and predicts problems, and “sovereign AI,” where countries develop core AI capabilities domestically rather than relying on foreign models.
He also described the debate over AI regulation, saying Japan and the United States tend to emphasize promotion of the technology while Europe leans more toward stronger controls, and he warned that military applications could become the ultimate driver of AI investment—even as that raises ethical concerns and sparks opposition in some markets. Kurose said institutional investors are increasingly reconsidering blanket bans on defense-related IT and AI, arguing that deterrence and national security are being reframed by some as part of “peace” and “self-defense.”
The discussion also touched on the darker side of AI, including deepfake-style impersonation scams, with Kurose saying his image and voice have been used for fraudulent investment promotions and that his firm has received complaints, highlighting how cheaply and realistically such content can now be created.
Asked about the outlook for U.S. equities popular with Japanese NISA investors, such as the S&P 500, Kurose said last year’s market saw repeated “AI shock” fears and pullbacks, but strong earnings and rapid technical progress helped push prices back toward year-end highs, and he expects a similar pattern in 2026: occasional steep drops followed by recoveries to new highs.
He summed up his core message with a maxim: “Maintain rational bullishness by resisting instinct,” arguing that humans are wired to overestimate risk for survival, even though historically markets spend far more time rising than falling, and that the psychological pain of losses can feel several times larger than the pleasure of gains—even when the ledger is flat.
Source: TBS
