Global Exposure Guide 2026 – Japan: Japan Equity Strategy | Japan

Research evidence excerpt

Global Exposure Guide 2026 – Japan: Japan Equity Strategy | Japan

Foundation

June 28, 2026 08:11 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MJapan Equity Strategy | Japan Ukyo Haraguchi, CFA

Quantitative Strategist

Global Exposure Guide 2026 – Ukyo.Haraguchi@morganstanleymufg.comMorgan Stanley & Co. International plc+ +81 3 6836-8925

Stephan M Kessler

Quantitative AnalystJapan Stephan.Kessler@morganstanley.com +44 20 7425-2854

Ronald Ho, CFA

Against the backdrop of a multipolar world where AI/ Quantitative Analyst

Ronald.Ho@morganstanley.com +44 20 7425-2722

semiconductor demand, FX movements, and regional growth Stephan Heller

disparity are increasingly affecting Japanese companies' earnings Quantitative Analyst

Stephan.Heller@morganstanley.com +44 20 7425-9753

and share prices, we present the results of our annual survey on

Morgan Stanley India Company Private Limited+

Japanese companies' revenue breakdown by region/country. Rakhi Arora

Quantitative Analyst

Rakhi.Arora@morganstanley.com +91 22 6996-2259

Key Takeaways

Morgan Stanley MUFG Securities Co., Ltd.+

We survey and analyze the exposure of nearly 500 Japanese firms in our Sho Nakazawa

coverage universe to certain regions and countries worldwide. Equity Strategist

Sho.Nakazawa@morganstanleymufg.com +81 3 6836-8926

These firms have overseas revenue exposure of 40-50%. The ratio has gradually

increased even at non-manufacturers in recent years.

In terms of share price performance, domestic demand stocks have

underperformed over the past year, reflecting yen depreciation and the AI rally.

Within the domestic demand stock universe, factor return dynamics differ from

those of the broader market.

While valuation-driven stock selection remains effective, momentum and revision

effects are less evident.