Japan Sector Outlook: July 2026 (Digest)

研报英文原文证据摘录

Japan Sector Outlook: July 2026 (Digest)

Nomura | Japan Sector Outlook 3 July 2026

Construction ResearchJapan constructionAnalysts

Rising interest rates and construction costs have pushed up costs for new developments, Sho Sakabe - NSC

and we see a risk of a decline in new developments in regions and for uses where it is

difficult to recoup investment via rent hikes. At the same time, we expect ongoing strong

investment demand for semiconductor plants and data centers, and we also think there

will be a shift from new-build to repair work in response to rising costs. We focus on

HVAC installation and electrical engineering companies, and recommend Takasago

Thermal Engineering on the prospect of profit growth from 27/3 H2 onwards driven by

the booking of sales on major semiconductor projects as well as increased orders for

upgrade and data center projects. Among general contractors, we recommend Kajima,

where we see plenty of upside versus 27/3 operating profit guidance and expect profits to

grow over the medium term via real estate sales, and among civil engineering-oriented

specialty engineering companies we recommend Totetsu Kogyo, which we expect to

generate solid orders as its main customers disclose plans for increased maintenance

and repairs.

Housing & real estate ResearchJapan housingAnalysts& real estate

Investment money has been shifting substantially to AI- and semiconductor-related Daisuke Fukushima - NSC

stocks. There is waning interest in housing and real estate stocks, and investment in

physical real estate has also been losing its appeal, partly because of concerns about

rising interest rates in Japan and the US, and we note the risk of a decline in real estate

liquidity. At the same time, cost-push inflation has made it harder to develop real estate at