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Rising inventories a harbinger of stock growth

Companies with virtuous production cycles have beaten the Nikkei since September

The Nikkei Stock Average rose as much as 30% during periods of expanding production and inventories.

TOKYO -- Japanese corporations scaling up production and inventories are giving analysts hope that the domestic equity market will maintain its bull run for at least another year.

One such company is cosmetics maker Shiseido. Its shares have jumped 21% since the end of September, besting the 12% gain posted by the Nikkei Stock Average. The company said in late October that it is pouring at least 30 billion yen ($263 million) into building its first new domestic plant in 36 years. The facility will begin making skin care products for the Asian market in 2019.

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