An employee of a trading company looks at monitors showing U.S. President-elect Donald Trump speaking on TV in Tokyo, Nov. 9, 2016.

U.S. stocks may be charging higher since the presidential election, but some analysts see more opportunity in the Japanese markets.

"Japan is now our top pick in global equity regions, replacing the U.S.," Jonathan Garner, Morgan Stanley's chief Asia and emerging market equity strategist, said in a note Sunday.

The firm issued a "double upgrade" on Japanese stocks, moving its rating two rungs higher to overweight and reversing a previously negative view on the country. Japan's economy has struggled to post substantial growth since at least the late 1980s.

The positive turn on Japanese stocks comes with the yen's new weakness against the U.S. dollar, which has surged to its highest level in more than 13 years. The yen is down almost 8 percent against the dollar for November, hitting 113.89 last week, its lowest level versus the greenback since March.



"There comes a point where the weak yen and the (Japanese government 10-year bond yield) pegged to zero that starts to make Japanese equities look attractive," Lee Ferridge, head of macro strategy, North America, at State Street Global Markets, said last week. If he were to look at any country's stocks outside the United States, he said, "it would be the Nikkei."



The is up about 3 percent since the U.S. election on Nov. 8, while Japan's Topix index is the best performer globally with gains of about 6 percent, in local currency terms.