'Help! Help! The sky is falling!' : Aozora Bank's (あおぞら銀行) previous crashes in 2016 & 2020 + the PBR / EPS upside in the Tokyo bourse

 

This implies it could find a bottom anywhere between ¥1,893 & ¥ 2,065 in the current shock result-induced crash.

The price book ratio(PBR) of the stock index found its peak in a triple top in '13/'14/'15  though the Nikkei index only topped out in earnest in Jun '15. After this years scintillating rally, it recently poked its nose above 1.4 x & if it were to peak again in this cycle at around 1.5x, that would imply a medium term target of anywhere between 38,300-38,700 before alarm bells need to go off. 

In relation to the TOPIX index EPS, that measure peaked several months before the earnings peak in 2015, 2018 & 2021 and has not much predictive value apart from a possible 3-year cycle peak since stock prices would already have begun to decline by the time EPS peaks. However at around 14-15x now, it's significantly lower than the 2018 P/E & slightly lower than the 2021 P/E ratio at the time of those peaks. Compared to the US P/E ratios & those of the last decade, the current ratio is still in middling range and has room to rise.