(Bloomberg) -- A heightened sense of risk and opportunity is building in Japanese markets on Friday as Prime Minister Shigeru Ishiba prepares for his first meeting with President Donald Trump.

Most Read from Bloomberg

Defense, energy and AI-related stocks are in focus amid speculation that they may see further gains, and while investors see the auto sector in the firing line, the less that is said about tariffs during the meeting, the better it will be for these key exporters.

The yen, which has moved higher this week, is vulnerable to increased volatility as investors try to work through the implications for both trade and inflation of levies Trump imposes on imports to the US.

Japan has so far stayed out of the crosshairs of Trump’s wide-ranging tariff threats, providing some reason for optimism. But worries over Japan’s trade surplus with the US linger, and Ishiba is going into Friday’s meeting with far less diplomatic experience than former prime minister Shinzo Abe, who was credited with managing Trump well, but was still unable avoid tariffs over steel and aluminum.

“Ishiba will want to explain to Trump that Japan is not actively keeping its currency weak to expand its trade surplus,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management SA in Singapore, who is keeping a close eye on the auto and pharmaceutical industries.

Read: Japan’s Ishiba to Tread Cautiously in First Meeting With Trump

Phillip Wool, head of portfolio management at Rayliant Global Advisors Ltd. in Hong Kong, said if the meeting is more of a “bonding session between the two leaders,” energy and defense may take center stage.

Here’s a closer look at some of the market areas to watch:

Defense and AI

Defense-related companies such as IHI Corp, Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd. have been among the best performers on the Nikkei 225 measure over the past year.

“Should Japan commit to higher military spending or additional U.S. equipment purchases, companies like Mitsubishi Heavy Industries could gain,” said Dilin Wu, a research strategist at Pepperstone Group Ltd.

AI expenditure is another area of focus for Trump, with his multi-billion dollar Stargate venture that will be led by ChatGPT developer OpenAI, Japan’s SoftBank Group Corp. and software giant Oracle Corp.