Fidelity Investments stated in an article that Japan's gradual recovery of mild inflation and normalization of monetary policy are beneficial for its economy and stock market. With inflation driving Japanese companies to increase profit margins, restructure assets, and enhance shareholder returns. The bank believes that companies improving shareholder returns in the utilities sector, as well as those increasing valuation through enhanced cash utilization and unwinding cross-holdings in the automotive sector, will benefit from the improving domestic situation in Japan. With continued prospects of inflation and the Bank of Japan expected to continue tightening monetary policy, interest rate-sensitive financial stocks, particularly large banks and non-life insurance companies, may present investment opportunities. Fidelity pointed out that the construction industry remains a good choice, including general contractors, subcontractors, and building materials companies. Japan's strong capital expenditure environment and continued pricing power recovery will drive profit margin expansion unaffected by global macro conditions. The bank's top pick is general contractors leading the industry in profitability, capital efficiency, and shareholder returns. More broadly, Japanese companies are increasing investments in labor-saving technology and digital transformation to enhance productivity. The bank believes that investing in information technology service companies can capitalize on this trend. On the other hand, Fidelity is bearish on semiconductor stocks. Regardless of the potential impact of tariffs, the bank increasingly sees the 2025 semiconductor cycle in a negative light, especially in DRAM, NAND, and semiconductor equipment. However, considering the potential recovery in the global manufacturing cycle, the bank will continue to focus on investment opportunities in factory automation, particularly in companies with strong business models and profit recovery prospects. Looking ahead, the bank believes that the incoming Trump administration will not change Japan's positive momentum. If Trump can accelerate economic growth in the United States, Japan's inflation recovery process is likely to strengthen. However, some favorable trends are unlikely to change due to Trump's policies, including domestic political pressures driving wage growth, companies facing pressure to improve governance, and companies transitioning from cash hoarding to more effective capital allocation. In the future, the Japanese government may need to reach agreements with the Trump administration, which could lead to increased defense spending commitments. Negotiations between the two countries may bring more favorable contract terms, potentially benefiting heavy industry companies and creating investment opportunities. Meanwhile, the US may implement tariffs (including potential tariffs on countries such as Mexico or Canada), which may appear to hit Japanese companies exporting to the US. However, these Japanese companies' American competitors are not immune. Therefore, considering the production proportions of the North American Free Trade Agreement, it is expected that the cost increase for major Japanese automakers will be similar to their American counterparts, and their relative competitive position is unlikely to change significantly.