Mitsubishi UFJ Ousts Toyota as Japan’s Most Valuable Company

Japan’s largest company by market capitalization has changed repeatedly this year. After Toyota Motor Corp. lost the top spot it had held for years to SoftBank Group Corp. and then Kioxia Holdings Corp., Mitsubishi UFJ Financial Group Inc. has now climbed to No. 1.

The turnover underscores how leadership in Japan’s stock market is spreading beyond automakers to artificial intelligence, semiconductors and financials. That contrasts with South Korea’s stock market, where Samsung Electronics Co. and SK Hynix Inc. account for more than half of total market value.

Mitsubishi UFJ rose 2.31% to close at 3,541 yen in Tokyo trading on July 13, lifting its market capitalization to 41.9048 trillion yen. That topped Toyota’s 40.8659 trillion yen and Kioxia Holdings’ 36.5831 trillion yen, making Mitsubishi UFJ the most valuable company in Japan.

It is the first time in 40 years that a Japanese financial institution has ranked No. 1 by market capitalization, the first since Sumitomo Bank in 1986. Nihon Keizai Shimbun said the shift is highly symbolic because it points to a revival in Japan’s banking industry after the bursting of the asset bubble, bad loans, deflation and negative interest rates.

The top spot has changed seven times this year, moving in the following order: Toyota, SoftBank Group, Toyota, Kioxia Holdings, Toyota and Mitsubishi UFJ.

Mitsubishi UFJ’s ascent is part of a broader shift in the stocks leading Japan’s market this year. Toyota remained Japan’s largest company at the start of the year, but SoftBank Group shares later surged as enthusiasm for AI-related growth intensified.

SoftBank Group overtook Toyota on expectations for broader investment in AI semiconductors and data centers. The change showed investors shifting their attention from traditional manufacturing to advanced technology, with an AI-focused investment company replacing an automaker at the top of Japan’s market.

Toyota later reclaimed first place, but Kioxia Holdings then moved to No. 1 on surging memory-chip prices and expectations for improved earnings. As AI data-center expansion boosted demand for NAND flash and DRAM, investors rapidly reassessed the value of memory-chip makers.

Financial stocks came next. Mitsubishi UFJ rose to the top on expectations for Bank of Japan policy normalization, a recovery in corporate loan demand, growth in overseas financial operations and stronger shareholder returns.

Japan’s stock market was once dominated for extended periods by a small group of large companies such as Toyota and Nippon Telegraph and Telephone Corp. This year, however, the top spot has shifted each time the market’s main growth theme has changed.

Nikkei interpreted that as a sign that investment targets in Japan’s stock market have become more diverse. Different growth drivers are now working at the same time, including autos, AI investment, higher semiconductor prices and interest-rate normalization.

Some investors, however, say volatility in Japanese equities has increased. AI and semiconductor shares tend to reflect expectations quickly, while financial stocks are highly sensitive to the interest-rate outlook. That leaves open the possibility that the No. 1 spot could change again depending on the pace of Bank of Japan rate hikes, the staying power of AI investment and the direction of memory prices.

Choi Man-su, Tokyo correspondent, Korea Economic Daily, bebop@hankyung.com