While US equity markets are rebounding this week, thanks to President Trump’s softer tone toward Fed Chair Jerome Powell and Treasury Secretary Bessent’s optimistic remarks on tariff negotiations, I remain cautious.

Over the past two years, investors have heavily concentrated their portfolios in leading US stocks, which is reasonable as numerous amazing companies are US-based. But given the current macro environment, I believe increasing exposure to international and defensive-oriented names presents a compelling opportunity to diversify. One stock that stands out is West Japan Railway ((WJRYY Quick QuoteWJRYY - Free Report) )—a name many US investors may not know, but one well worth their attention.

I’ll admit I hadn’t looked closely at West Japan Railway until it showed up on the Zacks Rank #1 (Strong Buy) list this week. But after digging into the fundamentals, technicals, and macro backdrop, it’s clear this is a stock with significant appeal.

Image Source: Zacks Investment Research

West Japan Railway: A Stalwart of Japanese Infrastructure

West Japan Railway is a major transportation provider operating across western Japan. The company runs one of the most important regional railway networks in the country, including the Sanyo Shinkansen line, which connects economic hubs like Osaka, Hiroshima, and Fukuoka. In addition to its rail services, the company also operates buses, ferries, and has a growing presence in real estate, retail, and tourism, providing it with a diversified and resilient revenue base.

Japanese trains are world-renowned for their speed, efficiency, and punctuality, and West Japan Railway is a model of that operational excellence. This cultural commitment to reliability and customer service extends beyond railways and permeates the entire business. While WJRYY isn’t a high-growth stock, it offers what many investors are seeking in today’s market: consistency, stability, and defensive cash flow.

WJRYY Stock: Bullish Technical Setup with Attractive Valuation

WJRYY is also showing strong price action relative to US equity indexes. After struggling through a multi-year recovery after the COVID-19 pandemic, the stock has recently broken out of a large base, signaling a potential new leg higher. This “stage-one breakout” is often a hallmark of long-term trend shifts, and with momentum building, the technical setup looks increasingly constructive.

It’s valuation also supports the bullish thesis. The stock trades at just 13.4x forward earnings, below its 10-year median of 14.9x and significantly below the industry average of 18.3x. That means investors are getting a high-quality infrastructure business in one of the world’s most stable economies at a discount.

Image Source: TradingView

Why Should Investors Consider WJRYY Shares?

As global capital begins to diversify away from US dollar-denominated assets amid severe uncertainty, Japan offers an appealing alternative. A increasingly strong yen, attractive dividend yields, and a steady economy make Japanese equities, and West Japan Railway in particular, compelling for investors looking for global exposure without taking on excessive risk.

WJRYY may not be on every investor’s radar, but in this macro environment, it checks a lot of boxes. It’s a high-quality, defensive play with renewed momentum, improving earnings estimates, and a valuation that still looks cheap. For investors looking to add global diversification and reduce volatility, West Japan Railway is a name worth watching.