What's the next major catalyst for Japanese stocks? Goldman Sachs discusses

• Goldman Sachs expects increased foreign flows, particularly from US dollar-denominated investors, into the Japanese market.
• The upcoming US-Japan summit between Prime Minister Takaichi and President Trump is identified as a major catalyst for sectors like defense, reindustrialization, factory automation, and shipbuilding.
• Japan's market, specifically the Nikkei 225, has shown strong outperformance year-to-date in dollar terms compared to US indices like the S&P and Nasdaq.
• Japanese corporates have been significant buyers of their own stock, and Japan's industrial and robotics strengths position it favorably against AI-related disruption, attracting long-term foreign investment.

Goldman Sachs maintains an 'overweight' allocation to Japan, anticipating increased foreign investment driven by strategic US-Japan cooperation in defense, reindustrialization, and factory automation. The Japanese market has outperformed the US on a dollar-adjusted basis and is seen as a relatively safer haven from AI disruption.