Earnings estimates for Japanese companies are being upgraded faster than that of firms listed on any other Asian stock market, which is reason enough to buy into the Nikkei despite the recent volatility, says one strategist.
Japan's benchmark Nikkei 225 is down over 16 percent from its year-to-date high and was trading almost 2 percent lower at 13,072 in morning trade Wednesday on disappointment that the Bank of Japan (BOJ) took no action to calm a volatile bond market at this week's central bank meeting.
But Michael Kurtz, global head of equity strategy at Nomura is sticking to his target of 16,000 for the benchmark by the year-end - an over 20 percent upside from current levels - on strong fundamentals like company earnings.
"Let's keep in mind that even with the volatility in bonds and equities recently, there's been no impairment of the medium or long term economic growth outlook, nor has there been any impairment to the corporate earnings growth outlook," Kurtz told CNBC Asia's "Squawk Box" on Wednesday.
Japan's economy grew 1 percent over January to March over the previous quarter, revised up from an initial estimate of 0.9 percent.
In May, Japan's tech giants like Toshiba forecasted a 34 percent jump in operating profit to $2.6 billion for the 2013-2014 fiscal year, while Canon raised its 2013 operating profit forecast by $300 million in April on a weaker yen.