One of Japan’s exchange traded funds (ETFs) is touching new highs after the country’s gross domestic product (GDP) numbers came out.

The first quarter GDP rose 0.8% from the last quarter of 2007, which was better than expected, reports Trang Ho for Investor’s Business Daily.

After the news came out, Japanese stocks climbed and the Nikkei righted itself. It had lost ground earlier in the day after weak consumer confidence numbers came out. Last week, the iShares MSCI Japan (EWJ) rose 3.8% and is up 3% year-to-date.

Two factors could send the ETF in another direction, though, so it bears watching:

  • Toyota (TM) reported that its first-quarter earnings fell 14% from the year before, but its sales rose 22%. The automaker is 5.7% of the fund.
  • Mitsubishi UFJ Financial (MTU) is Japan’s largest bank. A newspaper reported that it may have lost four times estimates from subprime investments. The company makes up 3% of the ETF.

Other Japan-focused ETFs are trading up today, as well:

  • PowerShares FTSE RAFI Japan (PJO), up 0.9% year-to-date
  • WisdomTree Japan Small-Cap Dividend Fund (DFJ), up 5% year-to-date


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.