Japan (Nikkei 225) P/E ratio & earnings growth
Trailing and forward price-to-earnings ratios, CAPE and earnings for the Japanese equity market, calculated using the Nikkei 225 index, with history back to 1987. For the same multiples across every major market see P/E ratios by country.
| Measure | Aug 2026 | Aug 2025 | Chg |
|---|---|---|---|
| Trailing P/E ratio | 19.04 | 17.50 | +1.54 |
| Forward P/E ratio | 16.62 | 15.78 | +0.84 |
| CAPE ratio | 35.60 | 26.00 | +9.60 |
Trailing P/E is aggregate market capitalisation divided by aggregate normalised net income over the previous twelve months. Forward P/E uses consensus estimates for the next twelve months.
The 2000 spike above 120 is an earnings collapse, not a re-rating: the ratio rose because the denominator fell. Readings from the bubble years dominate any long Japanese chart and should be treated separately from everything after.
| Month | Trailing P/E | Forward P/E | CAPE | EPS index |
|---|---|---|---|---|
| Aug 2026 | 19.04 | 16.62 | 35.60 | 370.4 |
| 2025 Dec | 17.88 | 16.87 | 29.38 | 299.3 |
| 2024 Dec | 15.72 | 14.64 | 26.14 | 269.9 |
| 2023 Dec | 16.40 | 13.79 | 24.93 | 217.0 |
| 2022 Dec | 13.87 | 11.96 | 22.04 | 200.0 |
| 2021 Dec | 16.19 | 13.84 | 28.73 | 189.1 |
| 2020 Dec | 31.94 | 18.17 | 30.33 | 91.4 |
| 2019 Dec | 18.97 | 14.43 | 27.23 | 132.6 |
| 2018 Dec | 14.07 | 11.12 | 26.47 | 151.2 |
| 2017 Dec | 19.10 | 14.71 | 32.75 | 126.7 |
| 2016 Dec | 20.32 | 14.79 | 28.59 | 100.0 |
Aug 2026 at a glance
Year on year
Where Japan stands, August 2026
Japan trades at 19.04 times trailing earnings, against 17.50 a year ago. Index earnings rose 43% over the year while the index itself rose 55%. The multiple rose because price outran earnings.
At 16.62 forward against a trailing 19.04, analysts are pricing a 15% rise in earnings over the coming twelve months. That is an expectation rather than a forecast with a track record, and the gap is worth reading as the size of what is being assumed.
The decade that was all earnings
Japan's index has roughly quadrupled over the past ten years, and its multiple has barely moved: the trailing P/E was 18.5 in August 2016 and 19.0 in August 2026.
That combination is unusual and it is the single most useful fact about this market. A market that rises because its multiple expands is being re-rated — investors are paying more for the same profits. A market that rises while its multiple stands still is being carried by earnings. Japanese index earnings have compounded at roughly 14% a year for ten years, and almost the whole of the index's rise is that, not a change of opinion about Japan.
It is the opposite of the pattern in several markets that have risen further, where a large share of the gain came from the multiple rather than the profits underneath it.
Why the CAPE ratio disagrees
The CAPE ratio here is far higher than the trailing P/E, and the reason is arithmetic rather than judgement. CAPE divides price by ten years of inflation-adjusted average earnings. When earnings have grown as fast as Japan's have, the ten-year average sits well below current earnings, and the ratio is correspondingly higher.
This is the general weakness of CAPE in a fast-growing market: the measure is designed to smooth a cycle, and it cannot tell a cycle from a decade of genuine growth. Read the Japanese CAPE against its own history — where 1989's reading above 77 sits at one end — rather than against another market's.
The 1989 problem
Any long chart of Japanese valuations is dominated by the bubble. The CAPE ratio peaked above 77 at the end of 1989 and the trailing P/E passed 120 in 2000. Those readings make every subsequent number look modest by comparison, and they are the reason a "percentage of its historical range" statement about Japan means very little.
The useful reference period for Japan starts after the bubble deflated, not at the start of the series.
Where this data is used
Some examples. Siblis valuation data appears in peer-reviewed journals, central bank publications and the financial press.
The whole database, every trading day
This page publishes one reading a month for 16 countries. The Global Equity Valuations Database is the whole thing.
How this is calculated
Aggregate market capitalisation of the index constituents divided by their aggregate earnings.
- Trailing P/E — Aggregate normalised net income over the previous twelve months. Major purely accounting gains and losses are removed.
- Forward P/E — Consensus estimates for the next twelve months, aggregated the same way.
- CAPE — Price divided by the average of ten years of inflation-adjusted aggregate earnings.
- Earnings — Shown indexed, to provide a common baseline. Index-level earnings per share in yen are not comparable with other markets in level terms.
- Revisions — Figures are point-in-time. If a company later restates its results, the historic reading is left exactly as first published: the series reflects what was known at the time, not what is known now.
Cite this page
Siblis Research. (2026). Japan (Nikkei 225) P/E ratio and earnings [Data set]. Retrieved 31 August 2026, from siblisresearch.com/data/japan-nikkei-pe-cape/
@misc{siblis_japan_nikkei_pe_cape,
title={Japan (Nikkei 225) P/E ratio and earnings}, author={{Siblis Research}},
year={2026}, url={https://siblisresearch.com/data/japan-nikkei-pe-cape/},
urldate={2026-08-31}} Charts on this page may be reproduced free of charge with attribution to Siblis Research and a link to this page.