Market views· Sector Analyst
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The Japanese market is currently led by defensive sectors, which are demonstrating strong relative strength and momentum. Pharmaceutical and Real Estate sectors rank at the top, while cyclical sectors such as Steel/Nonferrous, Machinery, and Electronics are experiencing significant underperformance. This suggests a broadening risk-off sentiment across the market amid concerns over an economic slowdown.
Action: Given the clear capital rotation into defensive sectors, a strategy focusing on defensive sectors with strong relative strength and momentum, while reducing exposure to underperforming cyclical sectors, is effective.
| # | Type | |||||
|---|---|---|---|---|---|---|
| 1 | Pharmaceutical 1621.T | DEF | +16.91% | +12.32% | −1.51% | +23.86 |
| 2 | Real Estate 1633.T | DEF | +13.45% | −0.28% | −18.31% | +22.39 |
| 3 | Retail 1630.T | CYC | +13.41% | +2.32% | −0.61% | +20.67 |
| 4 | Automobile 1622.T | CYC | +12.70% | +2.58% | −0.68% | +22.62 |
| 5 | Energy Resources 1618.T | CYC | +12.67% | +12.84% | −0.28% | +16.60 |
| 6 | Foods 1617.T | DEF | +12.55% | +5.68% | +4.70% | +19.38 |
| 7 | Transportation 1628.T | DEF | +12.54% | +6.15% | +1.26% | +18.17 |
| 8 | Financials ex-Banks 1632.T | DEF | +11.52% | +1.99% | +8.52% | +17.70 |
| 9 | Trading/Wholesale 1629.T | CYC | +9.57% | +6.68% | −8.19% | +12.69 |
| 10 | IT/Services 1626.T | CYC | +8.11% | +12.50% | +11.85% | +12.20 |
| 11 | Chemicals 1620.T | DEF | +6.92% | +3.15% | −2.73% | +10.97 |
| 12 | Electric Power/Gas 1627.T | DEF | +6.81% | +5.69% | −6.47% | +11.53 |
| 13 | Construction 1619.T | DEF | +2.51% | −5.53% | −20.36% | +6.58 |
| 14 | Banks 1631.T | DEF | +0.48% | −1.15% | +7.16% | +4.54 |
| 15 | Machinery 1624.T | CYC | −2.82% | −8.08% | −24.75% | −0.93 |
| 16 | Electronics 1625.T | CYC | −3.81% | −4.44% | −5.44% | −4.21 |
| 17 | Steel/Nonferrous 1623.T | CYC | −12.97% | −9.11% | −36.44% | −10.41 |
Outperformance relative to the market is expected based on strong short-term relative strength and momentum.
Showing a recovery trend with recent strong momentum, this sector is attractive relative to the market due to its defensive nature.
A representative defensive sector maintaining consistent relative strength and momentum.
Exhibiting severe relative strength weakness and negative momentum across all timeframes.
Underperformance is expected due to persistent relative strength weakness and negative momentum.
Additional downside risk exists due to relative strength correction and negative momentum.
Maintaining top-tier status with a 20-day RS of +16.91%, significantly outperforming the benchmark. Momentum is also very strong at +23.86.
Recording top-tier performance with a 20-day RS of +13.45%, significantly outperforming the benchmark. Despite long-term underperformance, recent momentum has strongly recovered to +22.39.
RS 20d +13.41% indicates a sharp rise relative to the benchmark, placing it in the top tier. Momentum at +20.67 reflects a positive trend.
RS 20d -2.82% shows a slight decline relative to the benchmark, indicating underperformance. Momentum at -0.93 suggests continued weakness.
RS 20d -3.81% reflects a correction relative to the benchmark, keeping it in the lower tier. Momentum at -4.21 indicates deepening weakness.
RS 20d -12.97% indicates a sharp drop relative to the benchmark, recording the lowest rank. Momentum at -10.41 reflects a highly negative trend.
The market is exhibiting a clear rotation into defensive sectors.
The average 20-day RS of defensive sectors is +9.30%, outperforming cyclical sectors' +4.61% by 4.69 percentage points, indicating a risk-off bias. Top-performing sectors are predominantly defensive, while bottom-performing sectors are largely cyclical.
Key driver: Rising market uncertainty and growing preference for safe-haven assets are the key drivers.
Sector ETF prices relative to Nikkei 225 from AlphaLenz's daily price database, 31 Oct 2026.