This week we’re looking at Japan. As ever with our stock tips, we seek good fundamental plays which can yield solid growth, usually over a time horizon of at least 90 days, but frequently much longer.
Tipping stocks this week is a difficult job, as there remains a lot of uncertainty in the wider market. At time of writing there remains intense speculation that the so-called AI bubble is finally unwinding. Analysts remain desperate to call the top of the market, and everyone seems to recognise we are trading in tech bubble territory. But the question remains when to get out?
We continue to benefit from the performance of our Japan stock picks. We enjoyed a good run with Tsukada [TYO:2418], having tipped the stock at JPY 417. Shares hit a peak of JPY 742 in early September and we exited the trade in October at JPY 593 as the stock had obviously lost momentum.
Another Japanese name, Shin Maint Holdings [TYO:6086], we tipped at JPY 745. The shares closed at JPY 1073 on Wednesday.
Japan looks like a great investment
Japan remains a positive growth story overall, in our view, and the arrival of the new prime minister, Sanae Takaichi, should be good news for investors, even if the AI mega trade of 2025 starts to unwind.
Analysts are expecting the Takaichi government will continue to keep the fiscal taps turned on, which will mean a weaker yen, at least over the medium term, and further investment into key growth sectors like semiconductors and defence. We also expect the government to continue to roll out further reforms within the Japanese equity markets, which should help to unlock further value in Japanese stocks.
This is all creating a strong positive scenario which we think will support this week’s Japanese stock tip.
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