JPMorgan has lifted its target for the Straits Times Index (STI) to 6,500 points, citing a "just right" economic backdrop that is expected to fuel earnings growth and grant the authorities greater fiscal flexibility. Analysts at the bank stated that the favorable economic environment should continue to support earnings per share growth and create room for fiscal policy maneuvering. While valuations have now moved above their long-term average, the analysts believe this level can be sustained as the STI undergoes a re-rating, moving closer to other developed markets supported by high yields and currency stability. JPMorgan has also set its bull and bear case targets for the STI at 7,000 points and 5,000 points, respectively.