Best Tokyo Stock Market Stocks to Buy Now (December 5, 2025)

Updated: December 5, 2025 – based on news, forecasts and analyses available today.

Important: This article is for general information and education only. It is not personalized investment advice. Always do your own research and consider speaking with a licensed adviser before investing.

Why Japan – and the Tokyo Stock Exchange – Matters Right Now

Tokyo stocks are ending the week on a volatile note. On December 5, 2025, the Nikkei 225 fell about 1% as investors sold exporters on renewed speculation that the Bank of Japan (BOJ) could hike rates at its December meeting, while the broader market also eased as the yen strengthened. ^[1]

The move comes against a backdrop of:

Rising Japanese government bond yields – the 10‑year JGB recently hit its highest level since 2007. ^[2]
A yen hovering near ¥155 per dollar, a historically weak level that some analysts call a “ticking time bomb” if carry trades unwind and the currency snaps back. ^[3]
Growing expectations of a BOJ rate hike in December, which would support bank earnings but pressure richly valued growth stocks. ^[4]

Yet underneath this short‑term volatility, the Tokyo Stock Exchange (TSE) is being reshaped by powerful structural forces:

The TSE has pushed companies on its Prime and Standard markets to run their businesses with a sharper focus on cost of capital and stock price, encouraging better capital efficiency and higher shareholder returns. ^[5]
Corporate reforms, foreign inflows and near‑record share buybacks have helped the Nikkei “scale new heights” through much of 2025. ^[6]
The revamped NISA tax‑free investment scheme (Japan’s version of an equity savings account) has exploded in popularity. One in four adults now has a NISA account, purchases via NISA rose by about ¥18 trillion in 2024 and another ¥6 trillion in the first three months of 2025, and inflows into public investment trusts in H1 2025 neared ¥8 trillion. ^[7]

Put simply, Japan is evolving from a “cash under the mattress” culture toward equity ownership, while reforms force companies to care about shareholder value. That makes the Tokyo stock market one of the most interesting hunting grounds globally as we head into 2026 – even if day‑to‑day moves remain choppy.

How This List of “Best Tokyo Stocks to Buy Now” Was Built

Because “best” is always relative to risk tolerance and time horizon, think of the stocks below as high‑quality candidates for further research, not guaranteed winners.

For this December 5, 2025 update, the selection focused on TSE‑listed names that offer:

Clear structural tailwinds (AI, electrification, global brands, factory automation, financial normalization).
Positive or improving earnings trends and credible long‑term guidance.
Evidence of shareholder‑friendly behavior – buybacks, dividends, or explicit ROE targets.
Reasonable valuations versus growth prospects, compared with both Japan and global peers.
Liquidity and scale – most are large, widely followed companies suitable for institutional and retail investors.

With that in mind, here are eight core Tokyo‑listed stocks to watch now, plus a higher‑risk AI “bonus” idea.

1. Toyota Motor (TSE: 7203) – Global Auto Leader with an EV and Hybrid Edge

Why it’s on the list

Toyota remains the heavyweight of the Tokyo market – a global auto giant with deep cash flows, leading hybrid technology and a fast‑ramping EV and battery strategy.

Recent data underlines its resilience:

For the quarter ended September 30, 2025, Toyota reported revenue of about ¥12.4 trillion and strong vehicle sales, including a notable increase in electrified vehicles. ^[8]
Despite tariff headwinds, Toyota still expects full‑year operating profit of ¥3.4 trillion for the fiscal year ending March 31, 2026 – about 6% higher than its previous forecast. ^[9]
Management’s longer‑term outlook envisions revenue of roughly ¥52.4 trillion and earnings of ¥3.9 trillion by 2028, assuming ~3% annual revenue growth. ^[10]

Strategically, Toyota is leaning hard into electrification:

Production began this year at its first U.S. battery plant in North Carolina, a roughly $14 billion facility designed for 30 GWh of capacity and supporting a broad range of electrified vehicles. ^[11]
New launches like the 2026 Grand Hybrid SUV and technology upgrades to the RAV4 highlight Toyota’s push on connectivity and safety features – important differentiators as competition intensifies. ^[12]

Investment case

Tailwind: Global demand for hybrids and EVs, plus yen weakness, supports earnings.
Quality: Scale, diversification, and a strong balance sheet.
Valuation: Analysts see earnings growing around 6% a year, slightly slower than the Japanese market overall, which may leave room for upside if Toyota executes better than expected. ^[13]

Key risks

Margin pressure from tariffs and price competition.
Cyclicality in global auto demand.
Potential drag if the yen strengthens sharply.

Best suited to long‑term investors comfortable with the cyclical nature of auto stocks who want blue‑chip exposure to Japan’s manufacturing and electrification story.

2. Sony Group (TSE: 6758) – Entertainment, Imaging and Gaming Plus Buybacks

Why it’s on the list

Sony has evolved into a diversified entertainment and technology powerhouse across PlayStation gaming, music, films, image sensors and financial services.

On the capital‑allocation side, management continues to send a strong signal:

On December 3, 2025, Sony published an update on its share repurchase program, reporting continued progress under a board‑authorized plan to buy back common shares under Companies Act provisions. ^[14]

In the U.S. market, Sony’s ADR recently pulled back about 2% from near 52‑week highs, leaving the stock roughly 5% below its peak, on heavier‑than‑average trading volume. ^[15]

Investment case

Multiple growth engines: Gaming, high‑end image sensors for smartphones and automotive, music streaming, and film.
Shareholder returns: Ongoing share repurchases alongside dividends.
Reform beneficiary: As governance reforms push companies to focus on capital efficiency, Sony’s global footprint and diversified earnings make it a natural core holding for many Japan funds.

Key risks

Cycles in console hardware and game releases.
Competitive pressure in image sensors and consumer electronics.
FX volatility – a stronger yen would dampen overseas earnings.

Sony suits investors who want broad exposure to Japanese technology and media with a relatively balanced growth/risk profile.

3. Fast Retailing (TSE: 9983) – Uniqlo’s Global Expansion Story

Why it’s on the list

Fast Retailing, best known for Uniqlo, is one of Japan’s clearest global consumer brands.

Recent numbers are robust:

For the fiscal year ending August 2025, the company posted its fourth straight record profit, with operating profit up 13% to ¥564.3 billion – beating both its own guidance and analyst estimates. Strong domestic demand and a tourism boom more than offset weakness in Greater China. ^[16]
Management expects operating profit to rise further to ¥610 billion in the current fiscal year, and is accelerating expansion in North America and Europe, including new flagship stores in Frankfurt, Warsaw, Chicago and San Francisco. ^[17]
Latest quarterly figures show revenue climbing from ¥3.1 trillion to ¥3.4 trillion year‑on‑year, with EPS rising from roughly ¥1,213 to ¥1,411 and margins edging higher. ^[18]

A weaker yen also boosts profits from overseas sales when translated back into yen. ^[19]

Investment case

Structural tailwind: Casual, “lifewear” clothing with a global appeal, supported by scale and highly optimized supply chains.
Earnings momentum: Consistent profit growth and margin expansion.
Geographic diversification: Less reliant on Japan alone as North America and Europe grow in importance.

Key risks

China remains a large market and a source of volatility.
FX swings can cut both ways; a sharp yen rebound would compress reported profits.
Fashion retail is competitive and sensitive to economic slowdowns.

Fast Retailing is a compelling candidate for investors seeking growth at scale in Japan’s consumer sector.

4. Nintendo (TSE: 7974) – Switch 2 Supercycle and IP Powerhouse

Why it’s on the list

Nintendo has entered another powerful cycle thanks to the Switch 2, launched in June 2025.

Key recent developments:

The Switch 2 sold about 3.5 million units in its first four days, with Nintendo emphasizing mature, cost‑effective technology paired with innovative design and strong IP, rather than bleeding‑edge hardware specs. This approach has historically delivered operating margins above 30%. ^[20]
In its latest earnings, Nintendo raised its Switch 2 unit forecast by more than 25% – from 15 million to 19 million units by March 2026 – after selling over 10 million consoles in its first months on the market. Software sales are also booming. ^[21]
The company lifted its full‑year revenue forecast to ¥2.25 trillion and increased its operating profit guidance by 16% to ¥370 billion for the year ending March 2026. ^[22]

Beyond consoles, Nintendo is leveraging its IP through movies, theme parks and merchandising, further diversifying earnings. ^[23]

Investment case

Moat: Beloved franchises (Mario, Zelda, Pokémon) and “lateral thinking” design philosophy are hard to replicate.
Cycle: Switch 2 appears to be tracking as one of the fastest‑selling consoles in history, supporting strong near‑term earnings. ^[24]
Valuation: After a strong run, the stock reflects optimism but still offers upside if hardware and software momentum persists.

Key risks

Hardware cycles can be brutal when they end; the next platform transition is always a concern.
Dependence on a handful of major franchises.
Regulatory and tariff exposure in key markets like the U.S. and Europe.

Nintendo fits investors who view Japan as a global IP and entertainment play, not just a manufacturing story.

5. Tokyo Electron (TSE: 8035) – AI Chip Equipment Champion

Why it’s on the list

Tokyo Electron is Japan’s premier semiconductor equipment maker, supplying tools essential to fabricating advanced chips. It sits squarely in the path of the AI and high‑performance computing boom.

Fundamentals are supported by sector trends:

Japanese chip‑equipment firms like Tokyo Electron and Advantest surged after recent earnings, reflecting strong demand for AI‑related chip production; reports noted Tokyo Electron’s shares jumping nearly 9% after its October results. ^[25]
A recent rally saw Tokyo Electron climb more than 5% alongside other Japanese tech names, as investors piled into AI beneficiaries. ^[26]

Analyst expectations remain constructive:

Consensus 12‑month target price is around ¥34,800, implying roughly 10% upside from current levels, with a broad range of estimates reflecting sector cyclicality. ^[27]
Tokyo Electron’s earnings are forecast to grow about 9% per year, with revenue up around 7.4% annually and return on equity projected above 27% over the next three years. ^[28]

There is some headline risk:

Prosecutors in Taiwan have indicted Tokyo Electron’s local unit over alleged trade‑secret leaks tied to TSMC’s 2‑nanometer processes, with potential fines up to roughly $3.8 million. Analysts, however, view the financial impact as limited and see the case as clearing a lingering overhang if resolved. ^[29]

Investment case

Structural tailwind: Multi‑year capex wave in AI data centers and advanced memory.
Quality: High ROE and solid balance sheet, with strong positioning in leading‑edge processes.
Reform theme: Beneficiary of Japan’s push to rebuild domestic semiconductor capacity and attract foreign investment, such as Micron’s planned ¥1.5 trillion HBM plant in Hiroshima. ^[30]

Key risks

Semiconductor cycles can be brutal; earnings are sensitive to capex swings.
Regulatory and legal risks around export controls and IP.
Elevated expectations after a strong run.

Tokyo Electron is suited to investors comfortable with cyclical, but structurally growing, tech exposure tied to the AI build‑out.

6. Keyence (TSE: 6861) – High‑Margin Factory Automation Leader

Why it’s on the list

Keyence is a global leader in sensors, machine vision and factory automation, selling “picks and shovels” for smart factories and robotics.

Recent results show steady, profitable growth:

For the first half of FY2025, Keyence reported net sales up 5.8% year‑on‑year, operating income up 3.1% and net income up 5.4%. Second‑quarter net income grew more than 12%. ^[31]
As of late 2025, the company’s trailing‑twelve‑month earnings are estimated at around $6.8 billion, up strongly from 2023, underscoring its high profitability. ^[32]

Investment case

Structural tailwind: Global re‑shoring, automation, and labor shortages encourage higher capital spending on factory automation.
Moat: Direct sales model and high‑performance products create sticky customer relationships.
Financial quality: Exceptionally high margins and ROE, with net cash balance sheet.

Key risks

Valuation is often rich, reflecting quality and growth.
Capital‑expenditure cycles can slow in recessions.
Yen appreciation would weigh on overseas earnings.

Keyence is best seen as a core long‑term compounder for investors who can tolerate short‑term volatility and higher valuation multiples.

7. Mitsubishi UFJ Financial Group (TSE: 8306) – Banking on BOJ Normalization

Why it’s on the list

MUFG is Japan’s largest bank and a major global financial institution. As yields rise and monetary policy slowly normalizes, large banks look increasingly attractive.

Recent performance is strong:

For the July–September 2025 quarter, MUFG’s net profit rose 7% year‑on‑year to ¥747 billion, prompting management to lift its full‑year profit forecast from ¥2.0 trillion to ¥2.1 trillion for the year ending March 2026. ^[33]
First‑half FY2025 profits reached about ¥1.29 trillion, representing solid progress toward that target. The bank also highlighted healthy capital with a CET1 ratio around 10.5%. ^[34]

MUFG is also a direct beneficiary of higher rates:

After BOJ Governor Ueda’s recent hawkish comments, bank stocks rallied, with MUFG rising around 2.5% alongside peers as markets priced in a greater chance of a December rate hike. ^[35]

Investment case

Tailwind: Steepening yield curve and higher domestic rates support net interest margin.
Global diversification: Exposure to overseas lending, securities and asset management.
Valuation: Japanese mega‑banks often trade below global peers on price‑to‑book; improving profitability could trigger re‑rating.

Key risks

Credit risk if global growth slows sharply.
Regulatory and capital requirements.
Sensitivity to BOJ policy missteps and yen volatility.

MUFG is a logical choice for investors seeking value and yield from Japan’s financial normalization theme.

8. SoftBank Group (TSE: 9984) – High‑Beta Bet on Global AI

Why it’s on the list

SoftBank is the most aggressive way to play global AI and tech from Tokyo – but also one of the most volatile.

Recent numbers highlight both the opportunity and the risk:

For Q2 FY2025, SoftBank reported net profit of roughly ¥2.5 trillion, more than doubling year‑on‑year, driven mainly by valuation gains from its stake in OpenAI and other tech holdings. Its Vision Fund recorded investment gains of about ¥3.5 trillion, with more than ¥2 trillion coming from OpenAI alone. ^[36]
The group’s net asset value is estimated around ¥33–36 trillion, with a conservative loan‑to‑value ratio of about 16.5%, leaving room for further investments. ^[37]
Analysts note SoftBank has been stepping up AI investments and recently raised its fair value estimate for the stock, arguing that the traditional discount to net asset value has shrunk as the portfolio re‑rates. ^[38]

Strategically, SoftBank is deepening its AI footprint:

Arm, its chip subsidiary, just agreed to establish a chip‑design training center in South Korea to help train about 1,400 high‑level specialists – reinforcing Arm’s central role in the global CPU ecosystem. ^[39]
Vision Fund 2 continues to invest in AI startups, including a fresh stake in Sierra, an enterprise AI‑agent platform expanding into Japan. ^[40]

Investment case

Leverage to AI: Massive exposure to AI infrastructure (Arm) and AI applications (OpenAI, robotics, data centers).
Potential upside: If AI valuations remain high or rise further, SoftBank’s NAV could grow significantly.
Reform theme: As Japanese institutions and NISA investors embrace equities, high‑profile stories like SoftBank attract attention.

Key risks

High concentration in a small number of highly valued tech bets.
Market sentiment swings: SoftBank’s share price can move sharply on changes in AI narratives, as seen in its volatile performance in 2025. ^[41]
Complex structure and governance perception.

SoftBank is appropriate only for risk‑tolerant investors who want leveraged exposure to the global AI theme via Tokyo.

Bonus High‑Risk AI Play: Advantest (TSE: 6857)

If you’re looking for a more focused, high‑beta AI name, Advantest – a leader in semiconductor testing equipment – deserves a spot on the watchlist.

In late October, the company raised its operating profit forecast by 25% to ¥374 billion for the year ending March 2026, citing surging demand from AI data‑center investments. Operating profit for the July–September quarter jumped 71% year‑on‑year. ^[42]
The share price reacted dramatically, spiking about 22% in a single session, its biggest gain on record, and hitting all‑time highs amid optimism about a multi‑year AI‑driven test‑equipment cycle. ^[43]
One recent analysis notes the stock is up over 120% year‑to‑date, though it has cooled modestly in the last month – a sign that expectations are lofty and volatility is high. ^[44]

Advantest is for investors who are comfortable with sharp swings and valuation risk in exchange for pure‑play leverage to AI chip testing.

Big Picture: How to Think About Tokyo Stocks Going into 2026

As of December 5, 2025, the Tokyo market is being tugged in two directions:

Cycling forces:
- A weak but unstable yen, with the risk of a sharp rebound. ^[45]
- Rising JGB yields and BOJ policy uncertainty. ^[46]
- Profit‑taking and episodes of outflows from Japanese equity funds – including the biggest weekly outflow since 2007 back in May. ^[47]
Structural tailwinds:
- Deepening corporate governance reforms, improving capital efficiency and fueling buybacks. ^[48]
- NISA‑driven retail flows shifting household savings into risk assets, with NISA assets and account numbers rising sharply through 2024–2025. ^[49]
- Global investors increasingly treat Japan as an “anti‑bubble” – a market with relatively attractive valuations compared with the U.S., despite similar exposure to AI, autos, chips and world‑class brands. ^[50]

For many investors, the most sensible approach is to combine:

Core holdings in quality names like Toyota, Sony, Fast Retailing, Nintendo, Keyence and MUFG.
Tactical positions in higher‑beta beneficiaries of AI and tech – such as Tokyo Electron, SoftBank and Advantest – sized appropriately for your risk profile.
A focus on multi‑year themes, not day‑to‑day yen moves or rate headlines.

How to Use This List

If you’re considering adding Tokyo stocks to your portfolio:

Match ideas to your risk tolerance.
- Conservative: MUFG, Toyota, Sony.
- Moderate growth: Fast Retailing, Nintendo, Keyence, Tokyo Electron.
- Aggressive: SoftBank, Advantest.
Check valuations and price action before acting; some AI‑linked names have already run hard.
Diversify across sectors – autos, banks, consumer, entertainment, semiconductors – rather than betting everything on one theme.
Monitor BOJ policy and currency trends. A major shift in rates or a sharp yen rebound will change the risk/reward, especially for exporters and overseas earners.

Final Reminder

Nothing in this article is a recommendation to buy or sell any security. It’s a snapshot of opportunities and risks on the Tokyo Stock Exchange as of December 5, 2025, based on publicly available news and analyst data. Markets move fast; always verify the latest figures and consider professional advice before investing.