iShares MSCI Japan Index (EWJ) Monday, June 18, 2007
Posted by ei-forum in ETFs.add a comment
Some readers might be surprised to see us writing about an ETF but we feel that iShares MSCI Japan Index (EWJ) allows investors to try to exploit two different value plays at once:
1. Strengthening of the Yen and therefore rally against the USD and the Euro.
2. Shift of investor sentiment vs. Japan and therefore influx of funds in to the Nikkeï.
Despite the Bank of Japan refusing to raise interest rates; afraid that they could send the economy into recession, the overall picture seems quite positive. Economic growth is good, reaching 3,3% in the last quarter and latest consolidated figures for company profits increased 12% vs. last year.
These figures suggest that, if the recent pattern is confirmed, the Bank of Japan will have to raise interest rate and in turn, the market should react at an accelerated pace (please note that, as opposed to other indexes around the globe, the Nikkeï is still far from all time highs).
We believe in the long-term potential of Japan.
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