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Japanese defense stocks poised for offensive in a dangerous world

Technological arsenal geared for new threats, complex challenges

The Patriot missile system -- of which Mitsubishi Heavy Industries is the primary contractor -- is critical in Japan's defense against a possible North Korean missile attack. (Courtesy of Japan Air Self-Defense Force)

TOKYO -- The world is an increasingly uncertain place, and that is good for defense stocks. And just like more ordinary, less secretive industries, the performance of defense stocks depends largely on the technical sophistication of their products. By that measure, Japan has some promising names to watch.

In a November report on its Japanese equity strategy, investment house Goldman Sachs said it will continue paying attention to defense stocks in 2018, citing geopolitical tensions over North Korea and expectations for talks on amending Japan's constitution, which limits the role of its Self-Defense Forces.

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