Top Profitable Japanese Stocks to Watch in 2025

This is for informational purposes only, not investment advice.

Here is a general overview of some of the more profitable Japanese stocks and key things to watch for – not specific buying recommendations. Investing always involves risk, and you should consider your own goals, tax situation and currency risk before buying.

Toyota Motor Corporation (TSE 7203) – Ranked #1 in Japan by profit: ~$38.9 billion in profit over the past few years. Huge global scale and brand. Risks: Tariffs and strong yen hurt profitability. For example, Toyota expects a ~35% decline in net profit for fiscal 2025 due to tariff and currency pressures.

Sony Group Corporation (TSE 6758) – Ranked ~5th in revenue in Japan (~$10.17 billion). Diversified into entertainment/gaming/sensors, providing leverage for growth. Risks: Global competition, hardware cycles, currency impact.

Mitsubishi UFJ Financial Group (TSE 8306 / MUFG) – Net profit expected to be ~2 trillion yen (≈13.7 billion USD) for the year ending March 2026. Benefiting from rising interest rates in Japan (financial tailwinds). Risks: Credit cycle, global exposures, regulations.

Nippon Telegraph & Telephone Corporation (TSE 9432 / NTT) – Ranked ~#3 in Japan with revenue of ~$13.55 billion. Stable earnings, telecom/infrastructure business is defensive. Risks: Regulatory pressure, slower growth, technology disruption.

Shin‑Etsu Chemical Co., Ltd. (TSE: 4063) – FY2022: Revenue ~$21.6 billion, Net profit ~$5.4 billion. Strong niche business in semiconductor materials, global leader in key chemicals. Risks: Cyclicality in the semiconductor industry, raw material costs, exchange rate.

Why this choice?

1. These are large-cap Japanese companies with significant earnings, which provides a certain margin of safety and visibility.
2. They span a variety of sectors (automotive, technology/entertainment, financials, telecommunications, chemicals) – which helps to diversify sector risk.
3. Each has some growth history or structure (e.g. Toyota’s global automotive scale, Sony’s entertainment/technology mix, MUFG’s benefit from rising interest rates, Shin-Etsu’s materials niche).

Key risks to keep in mindKey risks to keep in mind

1. Currency risk: Many Japanese exporters/global companies are sensitive to movements in the yen. A stronger yen reduces the value of overseas earnings when converted.
2. Trade/tariff risk: For example, Toyota has indicated major tariff impacts in its outlook.
3. Valuation risk: Just because a company is earning a lot doesn’t mean future stock price appreciation is guaranteed – you’ll want to check the price-to-earnings ratio, price-to-book ratio, dividend yield, etc.
4. Sector-specific risks: For each sector (automotive, technology, financial, materials) there are tailwinds and headwinds (transition to electric vehicles for cars, technology hardware cycles for sensors, interest rate risk for banks, commodity cycles for chemicals).
5. Corporate governance/shareholder returns: Japan has improved in this regard, but it is wise to check each company’s share payout policy, buybacks, and governance.