Asia FX rises; US-Japan trade deal boosts yen, won to 2-week highs
Investing.com-- Bernstein analysts advised investors to focus on high-quality, high-yield Japanese technology stocks, citing resilience in sectors like entertainment and IT services despite recent market turbulence driven by tariff uncertainties.
Bernstein highlighted that Japan’s tech sector has gained 8% year-to-date, with entertainment and software outperforming, while tech hardware lagged.
Bernstein analysts noted that while valuations for some sub-sectors like entertainment appear stretched, semiconductors and factory automation stocks trade at historically low multiples, presenting a buying opportunity.
Entertainment stocks "still look best hedge against macro slowdown", while semis and factory automation could rebound sharply if tariff risks ease, analysts wrote.
They recommended Tokyo Electron Ltd. (TYO:8035), and Disco (OTC:DSCSY) Corp (TYO:6146) as top picks in semiconductors, citing strong demand for advanced packaging and memory equipment. Bernstein has "Outperform" ratings on both stocks.
"Material names such as Ibiden Co Ltd (TYO:4062) and SUMCO Corp. (TYO:3436) are cheap and should trade favorably, especially with Ibiden’s strong market share with product migration to Blackwell Ultra," analysts added.
Bernstein cautioned that tech hardware and electronic equipment face near-term headwinds but urged selectivity in high-yield names with positive earnings momentum.
Nintendo (TYO:7974) and Sony (NYSE:SONY) Corp (TYO:6758) were highlighted for their robust gaming pipelines and defensive appeal.