Japan Stocks Surge From Political Shifts. What the Charts Say About Toyota, Nintendo

A Toyota car dealership in Houston. (RONALDO SCHEMIDT/AFP via Getty Images)

Key Points

• Japan’s Nikkei 225 index surged 5% on Monday, driven by political optimism and expectations for pro-growth policies.
• Toyota Motor shares have climbed 19% over the past three months, outperforming Honda Motor.
• Nintendo has held above its 200-day moving average and is showing bullish technicals.

Japan’s stock market roared 5% higher Monday, ignited by rising political optimism and expectations for a wave of pro-growth policies. The Nikkei 225, which had largely tracked the S&P 500 over the past year, broke away decisively to start the week. The divergence is clearly visible in the comparison chart below.

The rally was broad, lifting everything from technology and industrials to financials. Over the past year, the Nikkei is now up 23%, outpacing the S&P 500’s 17% gain. Moves of this magnitude from a major index often see follow-through, though some near-term digestion wouldn’t be a surprise. With that in mind, let’s spotlight a few standout names from the region showing compelling technical setups.

The Nikkei, which had largely tracked the S&P 500 over the past year, pushed away Monday.

Toyota Motor has posted a modest 2% gain in 2025, but its 3% dividend yield adds appeal. Over the past three months, shares have climbed 19%, doubling main rival Honda Motor’s performance in the same period. The key $200 level has acted as a battleground, first rejected after a strong 12% weekly gain to close out 2024. More recently, the stock hovered above that mark for six weeks between August and late September, managing just one marginal close above it. Candlestick action has been telling, with notable doji candles in March and April 2024 marking tops, and a bullish morning star last August followed by a piercing line reversal in April. I like this setup above $202, with a near-term target of $250 by mid-2026. Maintain a bullish bias as long as it holds above $190.

Toyota Motor traded at $199.54 Tuesday.

Toyota’s stock isn’t shying away from very round $200 number like it did last December.

Mitsubishi UFJ Financial Group is having a standout 2025, up 33% year with a solid 2.8% dividend yield, outperforming the iShares MSCI Japan ETF. The stock sits just 4% below recent 52-week highs and is now back above the sharp 30% correction from the March/April period (it also quickly shrugged off a similar correction in August 2024 and quickly resumed its uptrend). The stock started a bull flag formation in early August as it filled in a gap from the July 22 session. Notice how that action was also a successful retest of a prior bull flag breakout. Enter now above $16 and look for $18.50 by year end.

Mitsubishi UFJ Financial Group traded at $15.23 Tuesday.

Mitsubishi Financial started a bull flag formation in August and has risen from there.

Nintendo is up 46% year to date with a 1% dividend yield, slightly outpacing peer Sony Group. The stock has held above its 200-day moving average since December and currently sits 14% below its 52-week high. Since April, it’s traded in a defined $20 to $25 range and recently filled a gap from the Aug. 1 session. After an 8% drop the week ending Sept. 19, the stock has shown little recovery. That could mean some weakness is still to come. Consider entering at $20.75, with an add-on above the double bottom pivot at $24.39. Stay bullish while it holds above $19.25.

Nintendo was trading at $21.35 Tuesday.

Nintendo is likely to feel a pull toward $20 before resuming an uptrend.

Write to Doug Busch at douglas.busch@barrons.com