S&P Capital IQ has a marketweight rating on EWJ, the largest Japan ETF by assets, and the research firm’s overall view of Japanese equities is less-than-enthusiastic.
“No persuasive fundamental rationale presently exists for either over-emphasizing or market-weighting Japan’s stock market any time in the foreseeable future. Macroeconomic activity should remain feeble; dissension will likely resurface in the policymaking process; fiscal and credit policy impetus should fall short of breathing new life into domestic demand; the regime will forego its target of achieving a primary budget surplus before 2020; and the widely anticipated re-election of the LDP, in unison with the Komeito Party, will ensure four more years of ineffective Abenomics,” said S&P Capital IQ.
Still, Japanese stocks are among the least expensive in the developed world, trading at deep discounts to not only peer markets but their historical averages as well. That combined with the recent strength of the U.S. dollar has some advisors and money managers mulling increased allocations to Japan ETFs. [Better Ways to Access Japan With ETFs]
iShares MSCI Japan ETF
