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Some South-East Asian economies' strategic advantages and supportive policies are propelling their emergence as a data center powerhouse.
In March, the Bank of Japan abolished its 8-year-old negative interest rate policy, hiking rates for the first time in 17 years by raising its benchmark rate to 0-0.1%. To combat inflation while also avoiding an excessive surge in interest payments, the BOJ is considering passive quantitative tightening.
We'd rather downplay the weaker-than-expected manufacturing data and focus on a solid recovery in retail sales and a reacceleration in inflation, which will be welcomed by the Bank of Japan. Inflation has been quite choppy due to various government programmes and utility prices.
Kei Okamura, Neuberger Berman SVP and Japanese equities portfolio manager, joins 'Squawk on the Street' to discuss whether buying Japanese stocks is still the hottest trade, where interest rates in Japan go from here, and much more.
By end-April 2024, Japanese equities had outperformed the FTSE All-World index over 12 months and in the year to date. Japan has undertaken significant structural corporate reforms in recent years.
iShares MSCI Japan ETF is the largest Japanese-focused ETF in the market with over $16.5bn in AUM. Japan's Q1 GDP which came out today, was worse than expected, with private consumption, which accounts for half the economy struggling to take off. EWJ is dominated by large industrial stocks, and the underlying conditions for these entities don't look too bright.
April was a relatively quiet month for ETFs across the board. U.S. equity inflows took a breather.
Ken Wong, portfolio specialist at Eastspring Investments, says that Japanese large caps "have run up quite a bit" but the market's mid and small caps are attractive. He also discusses the outlook for Chinese stocks on Bloomberg Television.
By Christopher Gannatti, CFA Global Head of Research Key Takeaways Japan's equity market reached a 35-year record high in the first quarter of 2024, driven by the weakness of the yen against the U.S. dollar.
Overall, ETFs pulled in $20.6 billion in capital last month, taking year-to-date inflows to $196.4 billion.