Japan has room to rise

Article Excerpt

ISHARES MSCI JAPAN INDEX FUND $56.02 (New York 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, 4.0%; Mitsubishi UFJ Financial, 2.2%; Sony Corp., 2.1%; Softbank, 2.0%; Sumitomo Mitsui Financial, 1.6%; Keyence Corp. (sensors), 1.6%; Honda Motor, 1.4%; and Mizuho Financial Group, 1.3%. The ETF’s MER is 0.49%. In the long term, Japan faces a labour shortage as its population ages, and it remains closed to immigration. In the short term, the trade dispute between the U.S. and China—two of Japan’s biggest export markets—is a worry. As well, the country imports almost all of its oil, so high oil prices hurt the economy. Despite these challenges, the Japanese economy remains sound and corporate earnings keep rising. In addition, the high U.S. dollar is a big plus for exporters. iShares MSCI Japan Index Fund is a buy. buy…