Bank of America lifts Nikkei target 15%, warns on concentration; U.S. homebuying preference rises
BAC•Bank of America raised its year-end Nikkei 225 target from 67,000 to 76,000, implying 15% upside and potential to reach 80,000, and cautioned on elevated stock concentration. Its homebuyer insights survey showed a majority of U.S. consumers now prefer buying homes over renting for the first time since 2023.
1. Nikkei 2026 Forecast Revision
Analyst Masashi Akutsu boosted the year-end Nikkei 225 target to 76,000 from 67,000 and raised the TOPIX target to 4,400 from 4,200, projecting nearly 15% upside and potential for an 80,000 peak by year-end, citing stronger AI demand and a stable Strait of Hormuz.
2. Elevated Concentration and Sector Strategy
The bank flagged stock concentration at levels only exceeded during the dot-com bubble in 2000 and the 2008 financial crisis, with the standard deviation of cumulative returns matching 2013 and 2021 peaks, and advised trimming high-valuation AI stocks while adding non-AI sectors as a hedge.
3. Shift in U.S. Homebuyer Sentiment
Its latest homebuyer insights survey revealed a majority of U.S. consumers now prefer purchasing homes over renting for the first time since 2023, indicating potential growth in mortgage origination and related banking services.
