Goldman Sachs Boosts TOPIX Target on Weaker Yen Expectations

Goldman Sachs has revised its target for the Tokyo Stock Price Index (TOPIX) to 4,500 points, citing expectations of a weaker yen as supportive for corporate profits. The bank's foreign exchange team forecasts that the U.S. dollar will rise to 165 against the Japanese yen within the next 12 months.

The sustained depreciation of the yen is expected to boost earnings for exporters and multinational corporations, according to Goldman Sachs. The bank projects that earnings per share on the TOPIX will increase by 13% to JPY 228 in fiscal year 2026, followed by growth of 11% and 9% in the subsequent two years.

Despite lingering near-term volatility risks, Goldman Sachs notes that the TOPIX has retraced only about 2% from its June all-time high, demonstrating notable relative resilience. The bank's medium-term bullish stance is supported by current valuations, which have stabilized within a forward price-to-earnings (P/E) range of 16x to 17x.