NIKKEI 225 
The Nikkei share average <.N225> is forecast to trade at 20,750 at the end of the year, up 3 percent from Wednesday's close of 20,130.41, according to the median of 20 analysts and fund managers polled by Reuters in the past week.
It is then forecast to reach 21,500 by end-June 2018.
Three months ago, the consensus among forecasters polled by Reuters had the Nikkei at 19,000 around now, which was too pessimistic. Only three of 21 forecasters surveyed in March thought it would be higher than where it is now.
"The strong U.S. economy, weak yen and solid Japanese corporate earnings will likely lift Japanese stocks higher," said Hiroyuki Fukunaga, chief executive of Investrust.
Forecasts for end-2017 ranged from 18,500 to 23,000. They were 20,000 to 24,000 for mid-2018, and 19,000-25,000 for end-December 2018.
After closing out 2016 just above 19,114 the benchmark index struggled earlier this year on geopolitical concerns, with a stronger yen capping gains.
There were also worries of political turmoil in the U.S. as President Donald Trump's firing of former FBI director James Comey heightened risk aversion as investors fretted that Trump's economic agenda could get derailed.
But the French presidential election in late April triggered a turnaround in global investor confidence.
The Nikkei began recovering from five-month lows as fears faded about a populist surge in Europe after Emmanuel Macron, touting a business-friendly vision of European integration, was elected president of France.
The dollar has stayed strong against the yen, which would lift Japanese manufacturers' profits abroad and boosted expectations of solid earnings this fiscal year.
"We expect Japanese companies to post an 11 percent gain in pre-tax profits this year. Companies should be able to prove that they are on track for strong results at their April-June period earnings releases," said Takuya Takahashi, a strategist at Daiwa Securities, who expected the Nikkei to trade at 22,000 at end-2017 and 22,500 at June 2018.
"Unless the yen strengthens sharply from the current level, companies earnings should support the Japanese market," Takahashi said.
Daiwa expects the dollar to trade around 110 yen throughout the fiscal year ending March 2018. The latest Reuters foreign exchange poll has it at 106 yen by end-May 2018. On Wednesday, the dollar traded around 112.16 yen
BOJ EXIT STRATEGY ON LONG HORIZON
The Nikkei broke through the 20,000-point barrier in early June for the first time since December 2015.
Last week, the Nikkei hit its highest level since August 2015, in large part as Japanese companies continue to expect better earnings for the current fiscal year.
While market observers expect more Nikkei gains in the near and medium-term, in the longer term, they note the risk around how the Bank of Japan may start communicating its exit strategy from ultra-easy policy without causing market turmoil.
Economists polled by Reuters earlier this month were divided on what the BOJ should do.
BOJ Governor Haruhiko Kuroda's term is set to end in April 2018 but he is still far from his goals. The U.S. central bank is raising rates and policymakers at the European Central Bank are debating tapering their monthly asset purchases.
"Ultra-loose policy will likely continue at least until April, but it will end eventually," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. He says the Nikkei could correct and trade at 19,000 by end-2018.
(To read other stories from the Reuters global stock markets poll)
(Additional polling by Indradip Ghosh, Sujith Pai and Vivek Mishra; Editing by Ross Finley & Shri Navaratnam)
By Ayai Tomisawa
