Japanese Prime Minister Shinzo Abe's landslide electoral victory this weekend could push the Nikkei to 20,000 and the yen above 105 against the dollar, the CEO of one of Asia's largest regional asset managers told CNBC.
Charles Beazley, head of Nikko Asset Management, said Abe's decisive win on Sunday made these lofty targets possible as he was now able to deliver his political agenda.
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"We are very excited, I have said before that I think 15,000 on the Nikkei is in sight, thereafter 20,000 becomes a plausible target," Beazley said on Monday. "If the yen trades between that 95 and 105 level and continues to drift up, I think reflation - which is essentially the exercise here - makes these targets very plausible indeed."
Abe's Liberal Democratic Party (LDP) and its coalition partner, the New Komeito party, won 76 of the 121 seats being contested in the 242-seat upper house election. On Monday, the Nikkei closed 0.46 percent higher at 14,658 and dollar fell against the yen to trade at 99.86.
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Beazley said the decisive win would enable Abe to strengthen the Japanese economy: "He [Abe] has said that a strong Japan requires a strong economy, and that he will move heaven and earth to make sure that economy becomes strong again."
The asset manager also welcomed Abe's reassurance to businesses that corporation tax would be cut, which he said would make "a gigantic difference."
"Recurring profits in Japan are forecast for the fiscal year 2012/2013 to be as high as 30 percent; the year after, about 15 percent - so this has a very dramatic impact on corporate profitability," he said. "I think it stimulates the desire of corporations to use some of that 1.2 trillion dollars in excess cash they have got sitting on their balance sheets and also corporate outlooks."
Yoshinori Shigemi, global market strategist at J.P. Morgan, said valuation and earnings momentum of Japanese equities remained in favor of further upside. He added that the Abe administration presents Japan's best opportunity to "break away from its economic lull since the Koizumi era."
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However, Steen Jakobsen, chief economist at Saxo Bank, was not so upbeat on the prospects of Abe's next term as prime minister. He told CNBC that Sunday's result was a vote for "spending money you do not have, printing money you do not have the collateral for and pretending that your intentions are to reform and create growth whereas you will do nothing of the sort."
—By CNBC's Jenny Cosgrave: Follow her on Twitter