Competition for the top spot in Japan's stock market by market capitalization is intensifying. While Toyota Motor has held the position for more than two decades, chip-related shares buoyed by the artificial intelligence boom and bank stocks lifted by rising interest rates are now emerging as contenders.
Four companies have held the No. 1 spot in Japan by market value this year — Toyota Motor, Kioxia Holdings, SoftBank Group and Mitsubishi UFJ — the Nikkei reported on the 21st. As of the 18th, Toyota Motor ranked first at 44.1 trillion yen, followed by Mitsubishi UFJ Financial Group, Japan's largest financial firm, at 42.9 trillion yen and SoftBank Group at 36 trillion yen. It is the first time four companies have topped the ranking in the same year since 1980, the earliest year for which data from financial information provider QUICK is available, the Nikkei said.
Toyota Motor has held the top spot for years, leading Japan's rise as an automotive power since 2003. That order began to shift sharply from the middle of this year. SoftBank overtook Toyota to take first place on June 1, but Toyota reclaimed the position three days later. Kioxia Holdings, a NAND flash memory maker, then moved into the lead on June 12, before Mitsubishi UFJ took the top spot on July 13 and has since traded places with Toyota.
Analysts say the global boom in AI and chip-related shares, which has powered Japan's stock market rally, has driven the fierce contest for the top market value. SoftBank, led by Chairman Masayoshi Son, owns British chip designer Arm and has invested in OpenAI. Kioxia has become Japan's flagship chipmaker, growing rapidly as demand for data center memory surged. It ranked only 43rd by market value at the end of last year before reaching first place this year. Its market capitalization was 784.3 billion yen when it listed in December 2024 and has since grown to as much as more than 75 times that level.
The rise of bank stocks is also notable. Bank shares struggled for years amid deflation and low interest rates after the collapse of Japan's asset bubble, but they have been reassessed over the past six months as the Bank of Japan raised rates in succession. It is the first time a bank has topped the market value ranking since Sumitomo Bank, now Sumitomo Mitsui Financial Group, did so in 1986. The market capitalizations of Sumitomo Mitsui Financial Group and Mizuho Financial Group have each also passed 20 trillion yen.
"This reflects a historically unprecedented and rapid shift in industrial structure," said Mitsunari Akino, president of Ichiyoshi Asset Management, who has managed Japanese equities since the 1980s. "It is not that Toyota has weakened, but evidence that the seeds of new industries are growing."
The Nikkei said that the more diverse the companies leading the market are, the more that leads to market stability and makes it easier to attract investment funds, adding that the broader mix of Japan's largest listed companies by market value has become an important factor supporting expectations of a sustained rally in Japanese stocks.
