EWJ Stock Recent News

Japan presents significant opportunities amid normalization and corporate reforms in the long-run. Short term risks are significant considering issues such as the weak Yen with appreciation pressure and shaky politics. Equities are relatively cheap compared with global peers but with good reasons.

Japan's market transformation towards shareholder-friendly initiatives and low earnings multiples make EWJ's current consolidation a buying opportunity, despite recent underperformance. EWJ offers diversified exposure to large and mid-cap Japanese equities, with a low 14.7 P/E ratio and a PEG ratio under 1.5. Technical analysis shows EWJ at trendline support with potential for bullish momentum, despite a bearish death cross and flat 200-day moving average.

The election victory has fueled a strong rally in US equities, but Trump's comeback is seen as a new risk factor elsewhere as Washington prepares to pivot to new edition of an “America First” policy. The latest surge in US shares has widened the lead for SPDR S&P 500 ETF (SPY) year to date.

Japanese equities have been volatile, but the iShares MSCI Japan ETF remains steady, offering exposure to large and mid-sized Japanese companies. EWJ benefits from the yen's strengthening due to its unhedged nature, outperforming its hedged counterpart, HEWJ, amid USDJPY declines. Despite BoJ's hawkish stance, EWJ's attractive portfolio, valuation, and bullish chart signal a potential breakout to new highs.

The Bank of Japan will adopt a more cautious approach to hiking interest rates after the recent global market turmoil and to avoid rapid appreciation in the yen, BMI said in a recent note. "We expect that the BoJ will take a more cautious approach and only hike by 25bps this year to 0.50%, down from our previous view for 50bps," said BMI's analysts.

Japan's Topix stock index slid 24% from a record high reached last month and the Nikkei 225 Stock Average suffered its worst one-day slump in yen terms as investor confidence evaporated. Tony Sycamore, analyst at IG Australia, shares his take on the plunge in Asian stocks and Federal Reserve policy.

The “real” policy rate is massively negative, with the new policy rate of 0.25% far below Core CPI of 2.6%. When QT reaches about ¥3 trillion per month in 2026, it would represent a reduction of its JGB holdings of about 0.5% per month.

EWJ tracks the MSCI Japan index with 210 stocks, has 0.5% expense ratio. EWJ has delivered solid return in the current bull market, with a good earnings growth outlook. The fund's valuation is not expensive, and has appreciation potential due to weakening U.S. dollar.

Strategists at Citi say it's time to election-proof portfolios, and that mostly means shedding overseas stocks, while loading up on banks.

Some South-East Asian economies' strategic advantages and supportive policies are propelling their emergence as a data center powerhouse.