ISHARES MSCI JAPAN INDEX FUND $11.89 (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, 5.2%; Mitsubishi UFJ Financial, 2.2%; KDDI Corp. (telecom), 2.0%; Softbank Corp., 1.8%; Honda Motor, 1.5%; Japan Tobacco, 1.5%; Sumitomo Mitsui Financial, 1.5%; Sony Corp., 1.4%; Mizuho Financial Group, 1.3%; and NTT DoCoMo (telecom), 1.3%.
Japan’s economy grew 1.9% in the first quarter of 2016, mostly on higher consumer spending. That was partly due to the government’s decision to postpone a scheduled sales tax increase.
Since then, the value of the yen has jumped to an 18-month high against the U.S. dollar. That’s hurting exports, although it has cut the cost of major imports such as oil.
Japanese Prime Minister Shinzo Abe recently won a “supermajority” government, with control over both houses of parliament. That will let him push ahead with economic reforms and restructuring measures to boost the economy. As part of that, the government has just launched another huge stimulus program, this time worth $274 billion U.S.
iShares MSCI Japan Index Fund is a buy.
