ETFs to Tap the Surge in Japan Stocks May 16, 2023

On the commercial end, the company provides point-of-sale systems, robots and industrial automation equipment. With Seiko Epson, I’m going to leave this list of Japan stocks to buy on a fun note. Frankly, I’m not sure if the catalyst that drives the fundamental storyline of SEKEF will hold up or not.

• NTT’s business spans mobile communications, data & international communications, real estate, system development and finance.
• In addition to managing markets coverage, he writes about stocks, bonds, currencies and commodities, including oil.
• However, analysts believe the positives far outweigh the negatives for the Japanese economy that is poised to make a comeback in late 2022.
• The investment is designed to track the price and yield performance of the WisdomTree Japan SmallCap Dividend Index (before fees and expenses).

A good recent example of an asymmetrical reward/risk investment in Japan is BP Castrol K.K. (the Japanese distributor of BP’s motor oil), Tokyo Stock Exchange ticker code 5015. When I began investing in BP Castrol in 2012 it was trading around 6-times earnings and at about a 15% discount to book value. Note that it had no short or long-term debt and its cash and equivalents (all cash held in a money-market like account managed by the parent) approached its market capitalization of sub-US$100 million. BP Castrol had a history of earning 15%-plus returns on equity and was paying a 5%-plus dividend.

Japanese Stock Market

“Foreign investors are back – which says something about the nature of the equity market recovery in Japan,” Societe Generale’s Asia equity strategists Frank Benzimra and Tsutomu Saito said in a Tuesday note. The Modified Predicted Return line indicates the expected, or predicted annualized return for the next eight years if the current TMC / (GDP + Total Assets of Central Bank) ratio reverts to its recent 20 years mean of 56.85%. The Predicted Return line indicates the expected, or predicted annualized return for the next eight years if the current TMC / GDP ratio reverts to its recent 20 years mean of 90.63%. Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

“I see even from companies who traditionally cannot be looked at as taking a lot of these things seriously are becoming much more serious about it,” said Ivailo Dikov, head of Japan equities at Eastspring Investments. A strong earnings season, a weaker yen and an economy that is showing signs of a sustained recovery have all helped the Nikkei (.N225) surge to multi-decade highs. As you can guess, Warren Buffett’s #1 wealth building strategy is to generate high returns in the 20% to 30% range. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days. Over the previous three years, DXJ has significantly outperformed EWJ by more than 50% due to a sharp rise in the dollar’s relative value to the yen.

Japan Historical GDP Growth

The market remains cheap too, trading at a price-to-earnings ratio of 17.6 compared with 27.6 for Nasdaq and 22 for S&P 500 index (.SPX), according to Refinitiv data. That spurred a rally which has helped the Nikkei somewhat shrug off its ‘value trap’ moniker, because of how companies focus on market share, hoard cash and care little about shareholder returns. Foreign investors pumped 5 trillion yen ($37 billion) into Japanese stocks in April, according to JPMorgan, a monthly milestone the brokerage says has happened only six times in history. The WisdomTree Japan Hedged Equity Fund DXJ invests in Japanese dividend-paying firms while hedging against currency swings.

Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy. Earlier this year, shares in Japan’s top five trading houses saw a boost in prices after chairman and CEO of Berkshire Hathaway Warren Buffett raised his stakes in the firms and hinted that he may increase his Best japanese stocks holdings even further. Michael Wolf, a research analyst for Deloitte, said in a research note in July that Japan’s economic recovery was likely strengthening as pent-up demand pushes consumer spending higher. The analyst added, however, that inflation was outstripping wage gains, raising the risk that the rise in consumer spending may be short-lived. Wolf was of the opinion that the trade balance was also likely to improve as tourism returns and China comes out of lockdowns, but a weakening global economy likely presented a serious risk to external demand.

ETFs to Tap the Surge in Japan Stocks

SINGAPORE, May 23 (Reuters) – As Japan’s stock market sits atop 33-year highs last seen during the country’s ‘bubble” era, investors are bullish that the rally in the world’s third-largest market has only just begun. Strong fundamental data, record profits and investor sentiment are pushing the Japanese stock market strongly higher to reach new multi-decade highs. Actually Warren Buffett failed to beat the S&P 500 Index in 1958, returned only 40.9% and pocketed 8.7 percentage of it as “fees”. His investors didn’t mind that he underperformed the market in 1958 because he beat the market by a large margin in 1957.

Yet, as gains top nearly 20% for the year, making it the best performing Asian stock exchange and just behind the tech-heavy Nasdaq (.IXIC) in the global scorecard, investors are still chasing the rally. If Warren Buffett’s hedge fund didn’t generate any outperformance (i.e. secretly invested like a closet index fund), Warren Buffett would have pocketed a quarter of the 37.4% excess return. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Why Japanese Value Stocks Are A Great Opportunity

At the time of writing (20 January), the stock had last closed at JPY3,250 ($28.36) – a 2.75% increase since its start of the year close price of $27.60, as of 3 January 2022. At the time of writing (20 January 2022), the stock had last closed at $202.42 on the New York Stock Exchange (NYSE) – a 8.65% increase since its start of the year close price of $186.29, as of 3 January 2022. As the country navigates the Omicron scare, join us as we undertake a Japan stock market analysis https://investmentsanalysis.info/ and find out which Japan stocks to watch out for. The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors.

Japanese stocks have long meant career risk and ridicule for those professionals brave enough to venture back into the once moon-bound market. Steven is author of Investing in Japan, which provides a complete overview of investing in the country. Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes.