Japan got caught in the tech selloff. Now it’s time to buy the dip, says strategist.

The recent global technology selloff has not spared Japanese equities, with export-oriented tech names taking a hit alongside their US counterparts. One research firm, however, is pushing back against the bearish narrative, arguing the pullback creates a buying opportunity. The firm’s assessment rests on three pillars: cyclical, fundamental, and technical factors. Cyclically, Japan’s industrial and manufacturing base is well-positioned in the current global cycle. Fundamentally, ongoing corporate governance reforms and improving shareholder returns remain supportive. Technically, the correction has brought valuations toward more reasonable levels relative to history.

For market participants, the immediate focus should be on whether the broader tech selloff stabilizes. Japanese equities are highly sensitive to global sentiment and the tech sector’s trajectory. A prolonged decline abroad could continue to weigh on Tokyo, while a rebound could allow the structural supports cited by the firm to take precedence. Watching upcoming earnings releases and currency movements will be key, as both will shape the near-term path for Japanese stocks.