ISHARES MSCI JAPAN INDEX FUND $12.34 (New York Exchange symbol EWJ; buy or sell through brokers; us.ishares.com) is an ETF that tries to match the return of the Morgan Stanley Capital International (MSCI) Japan index. The fund’s top holdings include Toyota, 5.8%; Mitsubishi UFJ Financial, 2.9%; Honda Motor, 1.9%; Softbank Corp., 1.8%; Sumitomo Mitsui Financial, 1.8%; Mizuho Financial Group, 1.4%; KDDI Corp. (telecom), 1.4%; Takeda Pharmaceutical, 1.3%; Japan Tobacco, 1.3%; and Sony Corp., 1.2%.
Japan’s economy shrank 1.6% in the second quarter of 2015, mostly on lower consumer spending. The government raised the country’s sales tax to 8% from 5% on April 1, 2014, to raise funds to pay down debt. However, its ongoing stimulus package has only partly offset the resulting fall in consumer spending.
Japan needs a stronger world economy—especially in China, one of its biggest markets—to show renewed growth.
Still, many of the the stocks in the iShares MSCI Japan Index Fund continue to benefit from a lower yen. Under Prime Minister Shinzo Abe’s so-called “Abenomics” strategy, the Bank of Japan has pumped more money into the country’s economy, which is why the yen hit a 13-year low in June 2015. As a result, many Japanese manufacturers are exporting more goods.
iShares MSCI Japan Index Fund is a buy.
