In this piece, we will take a look at the top 20 companies in Japan by market capitalization. For more companies, take a look at Top 5 Companies in Japan by Market Cap.
Despite ranking 56th in the world in terms of area, Japan is the world's third largest economy. Its gross domestic product (GDP) is a whopping $4.3 trillion as of 2022, and in terms of population, Japan is the 11th most populous region in the world, which also makes it one of the most densely populated regions in the world.
The country is also a global power in modern day politics and has played an important role in history. Japan was one of the aggressors in the second world war, and its partnership with the Axis powers led by Nazi Germany led to the country facing devastating consequences as the war ended and the Allies won. However, within a couple of decades, after Japan surrendered and the war ended, the country rose to become the second largest economy in the world, second only to the U.S.
Japan's economic recovery began in stages, with the government first incentivizing the production of raw materials, then heavily encouraging industrialization, removing anti monopoly laws to protect domestic firms from foreign companies, and finally choosing to double the national income. However, this obsession with growth, which propelled Japan to the economic heights that it still occupies today, also led to a significant collapse in the 1990s. An excessively lax monetary policy and a stronger yen combined with global oil price shocks of the late 1900s also led to the infamous Japanese asset bubble burst, which led to a drop in real estate prices that continued until 2017.
However, modern day Japan is still an economic power. The Bank of Japan, which is Japan's central bank, has the second largest foreign exchange dollar reserves in the world, which sit at $1.2 trillion as of March 2023. At the same time, data from the International Monetary Fund (IMF) shows that as of 2022 end, the Japanese Yen was the world's third largest reserve currency, coming in second only to the U.S. Dollar and the Euro. Additionally, the Japanese Yen is part of a basket of six currencies that are used to determine the value of the IMF's special drawing rights (SDRs). These rights are the monetary equivalent of a points system that the IMF allocates to nations that are facing foreign exchange problems and need the fund's help to bolster their reserves to prevent economic pain.
Japan was also the world's fifth largest exporter in 2022, with traditional sectors such as automotive, iron, and steel, along with newer ones such as semiconductors, dominating the fray. It is also one of the most technologically advanced countries in the world, with a well developed space program. Japan is also the world leader in industrial robotics, keeping in tune with its rapid technological advancement that has enabled to it stand shoulder to shoulder with advanced Western economies. According to data from the Japan Robot Association, orders for industrial robots hit a whopping $7.35 billion in 2022, growing by 1.6% annually even at a time when the global economy was reeling from the energy shock ushered in by the Russian invasion of Ukraine. This set a new record, with a growth in car production and labor shortages stimulating the market. At the same time, robot production grew by 5.6%, and stood at 879 billion yen in 2022. Yet, fears of a global economic slowdown finally did hurt the industry as orders dropped by 4.3% and production dropped by 4% in the fourth quarter of 2022 year over year.
2022 was a year marked by fiscal policy tightening by all of the world's major central banks - except one. The Bank of Japan stood against the tide as it allowed the Yen to flow freely, which naturally resulted in a massive depreciation in the currency as funds flew to regions with higher interest rates. From 115 yen to a dollar in February 2022, the yen fell to 148 in October 2022, but since then it has gained some ground and currently trades at 134. This is despite the fact that the Japan Central Bank did not raise rates, and its equivalent of a monetary policy tightening came in the form of increasing the yield bands in which Japan's 10 year bonds trade.
Looking at what the future holds for the Japanese economy, research from the firm Deloitte provides some insights. Deloitte believes that while the Japanese economy will grow this year, the growth will be relatively modest as high inflation and a slow resurgence in the tourism sector hamper spending. In terms of numbers, estimates from the IMF show that the economy will grow at 1.8% this year, with the IMF's Japan mission chief Ranil Salgado sharing in January 2023:
In the case of Japan, have upgraded forecasts for Japan from 1.6 percent to 1.8 percent because of China's reopening and given the strong relations between China and Japan in terms of trade and tourism that has a positive spillover to Japan. Again, overall growth is expected to bottom out this year, but then recovering into 2024.
With these details in mind, let's take a look at Japan's biggest companies in terms of market capitalization. Out of these, the largest are Keyence Corporation (TYO:6861.T), Toyota Motor Corporation (TYO:7203.T), and Sony Group Corporation (TYO:6758.T).
We first used a stock screener to pick the biggest companies in Japan in terms of market capitalization. Then, since screeners often miss out on crucial firms, especially in foreign markets, we verified the list with the Topix Core 30 and the Nikkei 225 indexes. All market capitalization is listed in Japanese Yen, and the 20 largest companies in Japan in terms of market capitalization are listed below.
Top 20 Companies in Japan by Market Cap
20. Recruit Holdings Co., Ltd. (TYO:6098.T)
Latest Market Capitalization: JPY 6.07 trillion
Recruit Holdings Co., Ltd. (TYO:6098.T) is, as the name suggests, a staffing firm based in Tokyo. Along with Toyota Motor Corporation (TYO:7203.T), Keyence Corporation (TYO:6861.T), and Sony Group Corporation (TYO:6758.T) it is one of Japan's largest companies by market capitalization.
20. Nintendo Co., Ltd. (TYO:7974.T)
Latest Market Capitalization: JPY 6.47 trillion
Nintendo Co., Ltd. (TYO:7974.T) is one of the biggest video game and entertainment firms in the world, known for its titles such as Mario, and consoles such as the Switch.
19. ITOCHU Corporation (TYO:8001.T)
Latest Market Capitalization: JPY 6.59 trillion
ITOCHU Corporation (TYO:8001.T) is an industrial equipment firm that is one of the oldest on our list since it was set up in 1858. The firm mines for minerals, makes and sells textiles, and develops real estate.
18. Mitsui & Co., Ltd. (TYO:8031.T)
Latest Market Capitalization: JPY 6.6 trillion
Mitsui & Co., Ltd. (TYO:8031.T) is an industrial equipment manufacturer headquartered in Tokyo. The firm makes and sells a wide variety of products such as steel and car parts. It also sells other products such as wind turbines and explores oil and gas.
17. Daikin Industries,Ltd. (TYO:6367.T)
Latest Market Capitalization: JPY 6.83 trillion
Daikin Industries,Ltd. (TYO:6367.T) is a construction and building products firm based in Osaka. It was set up in 1924 and sells products such as air conditioners and air filters.
16. Hitachi, Ltd. (TYO:6501.T)
Latest Market Capitalization: JPY 6.89 trillion
Hitachi, Ltd. (TYO:6501.T) is an industrial equipment manufacturer set up in 1910 and based in Tokyo. The firm makes and sells a wide variety of products such as ATMs and manufacturing process scanners.
15. Takeda Pharmaceutical Company Limited (TYO:4502.T)
Latest Market Capitalization: JPY 7 trillion
Takeda Pharmaceutical Company Limited (TYO:4502.T) is a healthcare company based in Tokyo. The firm was set up in 1781 and it sells pharmaceutical products.
14. Tokyo Electron Limited (TYO:8035.T)
Latest Market Capitalization: JPY 7.10 trillion
Tokyo Electron Limited (TYO:8035.T) is a semiconductor equipment manufacturer headquartered in Tokyo. Its products include coaters, deposition systems, and testing equipment.
13. Mitsubishi Corporation (TYO:8058.T)
Latest Market Capitalization: JPY 7.22 trillion
Mitsubishi Corporation (TYO:8058.T) is one of the biggest industrial companies in the world. It sells power plants, cars, chemicals, fertilizers, and other products.
12. SoftBank Group Corp. (TYO:9984.T)
Latest Market Capitalization: JPY 7.58 trillion
SoftBank Group Corp. (TYO:9984.T), while primarily known for its investment division, is also a telecommunications service provider in Japan. It is headquartered in Tokyo.
11. Sumitomo Mitsui Financial Group, Inc. (TYO:8316.T)
Latest Market Capitalization: JPY 7.60 trillion
Sumitomo Mitsui Financial Group, Inc. (TYO:8316.T) is a commercial bank headquartered in Tokyo. The firm provides wealth management, loans, and merger financing services among others.
10. Oriental Land Co., Ltd. (TYO:4661.T)
Latest Market Capitalization: JPY 7.96 trillion
Oriental Land Co., Ltd. (TYO:4661.T) is a hospitality firm that operates theme parks and hotels. The firm is based in Urayasu and is known for managing Tokyo Disneyland.
9. Shin-Etsu Chemical Co., Ltd. (TYO:4063.T)
Latest Market Capitalization: JPY 8.32 trillion
Shin-Etsu Chemical Co., Ltd. (TYO:4063.T) is a chemical maker based in Tokyo. It also sells pipes, caustic soda, and products used to make semiconductors.
8. KDDI Corporation (TYO:9433.T)
Latest Market Capitalization: JPY 8.95 trillion
KDDI Corporation (TYO:9433.T) is a telecommunications provider headquartered in Tokyo.
7. Daiichi Sankyo Company, Limited (TYO:4568.T)
Latest Market Capitalization: JPY 9.17 trillion
Daiichi Sankyo Company, Limited (TYO:4568.T) is a Tokyo-based healthcare firm. It makes and sells products such as treatments for leukemia and anemia, cholesterol regulators, arthritis treatments, diabetes, and complications from tumors. It joins Keyence Corporation (TYO:6861.T), Toyota Motor Corporation (TYO:7203.T), and Sony Group Corporation (TYO:6758.T) in our list of the top Japanese firms in terms of market capitalization.
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Disclosure: None. Top 20 Companies in Japan by Market Cap is originally published on Insider Monkey.