Japan's economy is on firm footing. Having teetered into and out of technical recession for years, it has posted seven straight years of growth, and is on pace for an economic advance of around 1% for 2019 -- not stellar, but solid.
Prime Minister Shinzo Abe has become the longest-serving leader since World War II. That stability and decent business prospects has imbued executives with the confidence, finally, to embark on capital expenditure and expansion.
In fact, finding enough employees is normally the problem in Japan, not how to plot your business plan. Consumer spending has always been stronger than the numbers show -- and is accelerating due to demographic changes. Let's not forget this is still the world's third-largest economy by some stretch.
The Japanese brokerage firm Nomura has identified 10 stocks for growth in 2019. Here's a look at five of the best in Tokyo trade, after exploring the rest of the list on Wednesday.
Japanese banks have been a no-go area, hobbled as they are by massive cross-holding with "zombie companies" unable to pay back bad debts. But the biggest among them, Mitsubishi UFJ Holding Group (T:8306) (MUFG) , has a management team intent on instilling fiscal discipline into a sprawling empire.
MUFG has been striving to shed risk assets and exert tighter control over costs. Nomura believes net profit should accelerate in the 2020-21 fiscal year, with its medium-term strategies and cost savings kicking in.
ANA Holdings (T:9202) (ALNPY) in 2004 supplanted national carrier Japan Airlines as the most-profitable Japanese airline, and at 49 million passengers for 2017, carried 7 million more people than JAL.
Japan is experiencing a tourism boom, particularly among Asian travelers. There should be further growth for ANA in 2020, as it expands with new arrival and departure slots for international flights at Haneda Airport, previously Tokyo's domestic hub.
Domestic travel is also on the up, as Japan's post-war salarymen retire, having saved the bulk of their lives, and look to splash a little of that cash. Nomura calls ANA a "highly attractive investment prospect," particularly if fuel prices remain low.
Movie company Toho (T:9602) (THOGY) is the creator of Godzilla, not to mention the producer of the movies of Akira Kurosawa and Hayao Miyazaki. Nomura predicts strong results for its movie distribution and the cinemas that it operates.
The company has launched the Toho Global Project to promote its productions internationally, and appears to have a strong lineup of titles in the works.
Travel agency H.I.S. (T:9603) has invested heavily online, and has expanded strongly into travel insurance. It also operates theme parks in Japan and hotels both domestically and in destinations popular with Japanese travelers -- such as Bali, Guam and Australia.
It is another beneficiary of the "silver travel" boom, as Japan's population ages. With current employees also benefitting from greater vacation time, demand for international travel out of Japan should hit an all-time high this year. It should also benefit from the expansion of international-flight slots at Haneda Airport.
Secom (T:9735) (SOMLY) is Japan's biggest provider of security services. Those skills are in high demand as the 2020 Tokyo Olympics approach. Secom has some of the most-sophisticated security systems, based on 5G and artificial intelligence. Its health-care service VitaLook incorporates home medical services and community care, a growth sector given demand from Japan's aging society.