Morgan Stanley strategy note highlights structural corporate governance reforms in Japan driving higher dividends, buybacks, and ROE.
Earnings quality improves as firms restructure operations, cut costs, and maintain margins, reducing volatility amid global uncertainty.
A weak yen bolsters export‑oriented sectors like autos, machinery and electronics, cushioning earnings despite softer global demand.
Japan’s exposure to AI, electrification and factory automation positions its firms to benefit from rising global capex, while valuations stay reasonable.