Toyota Motor Corporation (ADR) (TM), Mitsubishi UFJ Financial Group Inc (ADR) (MTU): How Japan’s International Push Has Driven the NIKKEI 225 (NI225)’s Run

Toyota Motor Corporation (ADR) (NYSE:TM) and other Japanese manufacturers have also cut back on production in China due to rising labor costs, and moving on to cheaper nations and regions, such as Southeast Asia, has become the go-to move for the country’s producers. Yet, even service sectors, such as finance, are extending Japan’s reach into Southeast Asia, targeting a region often overlooked by investors that’s nonetheless primed for growth.

Japan’s government has offered incentives for investment in Southeast Asia, and the country’s big banks have been all too happy to play along. Japan’s largest bank, Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), announced the purchase of Thailand’s Bank of Ayudhya in July for more than $5 billion. The Thai economy is expected to grow 3.8% this year, a downbeat forecast lowered from earlier rates, but still higher than many advanced economies. For Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), it’s a buy worth taking on — an economy projected to be a big player in Southeast Asia in the future.

Fellow Japanese bank Sumitomo Mitsui Financial Grp, Inc. (ADR) (NYSE:SMFG) bought 40% of Indonesian bank BTPN earlier in the year for $1.5 billion, a stake that gives it an interest in the world’s fourth-largest country by population, and one of the globe’s rising star economies. Sumitomo Mitsui Financial Grp, Inc. (ADR) (NYSE:SMFG)’s stock has gained nearly 30% year to date, but expanding into a hot emerging market like Indonesia, with momentum in its sails, is a smart long-term move by this Japanese banking leader.

The article How Japan’s International Push Has Driven the Nikkei’s Run originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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