Japan 06 (Aug 17 - Dec 24)

[winston]

4 Japan ETFs to Scoop Up Now

by Sanghamitra Saha

The Japanese economy has long been at the receiving end of the beneficial easy money policy, which has put the economy on the growth path.

Though Japanese inflation is yet to pick up meaningfully, an uptick in domestic demand as well as external demand is something investors should cheer for.

As per Bank of Japan, the value of the country’s exports, adjusted for inflation, grew 3.9% in the first half of 2017 against the past six-month period.

Long Run of Economic Growth

A Reuters poll indicated that GDP in Q2 is expected to grow 2.5% year over year. The rate last scored in January-March 2016. On the other hand, Japan's GDP is expected to log six successive quarters of growth, which was last seen from January-March 2005 through April-June 2006.

The expected 2.5% GDP growth would translate into 0.6% sequential growth after a revised 0.3% rise in the first quarter of this year.

Upbeat Consumer Sentiment

The Japanese economy has been facing labor crunch, which in turn is likely to push up wages. As per BlackRock, “wages are rising just enough [in Japan] to bolster domestic consumption without eroding profit margins.” Unemployment has dropped to a 25-year low in Japan and the job-to-applicant ratio is at an all-time high.

This is good news for consumer sentiment and spending. The Consumer Confidence Index in Japan increased to 43.8 in July of 2017 from 43.3 in June and surpassed market consensus of 43.6. This was the highest reading in consumer confidence since March.

Plus, higher stock prices are creating a wealth effect. Private consumption, which makes up about 60% of GDP, will likely grow 0.5% in the second quarter, following a 0.3% rise in the January-March period.

Compelling Valuation

Robust earnings reports from major companies should draw investor attention too. Blackrock expects Japanese companies’ earnings growth to touch a three-year high in 2017.

Also, Blackrock believes that “Japanese stocks appear inexpensive on the global stage. They are trading at a 20% discount to U.S. peers on a 12-month forward price-to-earnings basis.”

What About Yen Strength?

There is only one glitch in the Japan story, i.e., a strengthening yen against the greenback. CurrencyShares Japanese Yen Trust FXY gained about 3% in the last one month (as of August 7, 2017) and 2% in the last six months. This doesn’t make a great situation for Japan’s large-cap investing as this has wider foreign exposure.

Large-cap Japan ETF iShares MSCI Japan ETF EWJ was up 8% in the last six months while currency-hedged Japan ETF WisdomTree Japan Hedged Equity Fund DXJ added about 4.3% and small-cap ETFiShares MSCI Japan Small-Cap ETF SCJ with more a domestic focus jumped 12.7% in the last six months.

Investors can thus play Japan’s small-cap stocks and ETFs like SCJ in the coming days. Focus on quality and low volatility ETFs could also be intriguing (see all Asia-Pacific (Developed) ETFs here).

ETFs to Buy

1. iShares MSCI Japan Minimum Volatility ETF JPMV
2. SPDR MSCI Japan Quality Mix ETF QJPN
3. Goldman Sachs ActiveBeta Japan Equity ETF GSJ
4. WisdomTree Japan SmallCap Dividend Fund DFJ

Source: Zack's

[winston]

vested ( 7315 Topix Inverse 1x)

Shorting because:-
1. Strengthening Yen
2. Only 4% correction from top
3. North Korea
4. High Debt
5. Low 15,000 Jul, 2016; High 20300 Jun, 2017; About 30% Rise from Range Low

Risk:-
1. Improving GDP growth
2. Japanese government buying Equities
3. Topix PE 13
4. Unlimited QE
5. Very low interest rates


Nikkei drops to three-month closing Low amid Trump uncertainties

The benchmark Nikkei average plunged to its lowest close in over three months on the Tokyo Stock Exchange Friday, hurt chiefly by growing concerns over U.S. President Donald Trump’s economic agenda.

Tokyo stocks came under selling pressure due to the yen’s strengthening against the dollar amid a risk-averse mood, an official of a bank-linked securities firm said.

Falling issues far outnumbered rising ones 1,672 to 279 in the TSE’s first section, while 72 issues were unchanged.

Volume rose to 1.671 billion shares from 1.436 billion shares on Thursday.

The stronger yen battered automakers Toyota, Nissan, Honda and Subaru, camera maker Canon, electronics maker Panasonic and technology firm Kyocera.

Megabank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, insurers Dai-ichi Life and Sompo Holdings and brokerage firms Nomura and Daiwa met with selling after their U.S. peers fared poorly in New York trading on Thursday.

By contrast, brewers Asahi Group and Kirin as well as Japan Tobacco, which makes beverage in addition to cigarettes, attracted purchases.

Also on the plus side were semiconductor-related Tokyo Electron and smartphone game developer KLab.

Source: Japan Times

https://www.japantimes.co.jp/news/2017/ ... ZeEBygjGM8

[winston]

Japan is still 3% under the 2015 highs, and about 50% off of all-time highs

So the Fed’s official announcement of reducing the balance sheet may be a green light for global capital to pour back in the policy divergence trade (i.e. short yen, long Japanese stocks).

A weaker yen and continued QE in Japan should push Japanese stocks much higher too. Remember, part of the BOJ's asset purchase program is buying Japanese stocks (via ETFs).

The easiest way to play the view of a weaker yen and stronger Japanese stock market: Deutsche X-trackers MSCI Japan Hedged Equity (DBJP) and WisdomTree Japan Hedged Equity (DXJ)--both yen hedged Japanese stock ETFs.

Source: Forbes

[winston]

BOJ Members: May Need Actions to Prevent Deflation Expectation if Geopolitical Risks Rise

Bank of Japan released the September Summary of Opinions at the Monetary Policy Meeting. Members agreed that the momentum toward achieving the inflation target of 2% is maintained.

However, members said if geopolitical risks heighten further, the BOJ may consider making policy adjustments as appropriate to prevent the deflationary mindset from emerging again.

As a consumption tax hike is scheduled in October 2019, it is necessary to further stimulate the aggregate demand by additional monetary easing so that the price stability target will be achieved in a stable manner.

Source: AAStocks Financial News

[behappyalways]

Japanese steelmaker Kobe becomes latest to admit fabricating data, warning car and jet makers
https://www.cnbc.com/2017/10/10/japanes ... -data.html

[winston]

Investors just bailed on these stocks – We’re in!

by Dr. Steve Sjuggerud

The very best way to take advantage of Abe’s revenge is through the WisdomTree Japan Hedged Equity Fund (DXJ) – which takes out currency movements, and gives us direct exposure to an index of Japanese stocks.

With the re-election of Abe ensuring higher stock prices and a weaker yen… with Japanese stocks hated by investors today… and with the uptrend in place… you haven’t missed it yet.

Source: True Wealth

http://thecrux.com/investors-just-baile ... s-were-in/

[winston]

Country ETFs Worth Owning: Japan

by Moyan Brenn

While the biggest country ETF investing in the Japanese market is sold by iShares, I’m going with the WisdomTree Japan Hedged Equity Fund (NYSEARCA:DXJ), the second-biggest country ETF available, primarily because its top 10 holdings account for 31% of the ETF’s 402 holdings providing a more concentrated portfolio.

This particular ETF is what put WisdomTree Investments, Inc. (NASDAQ:WETF) on the map because it was one of the first single-country, currency-hedged ETFs.

“DXJ provides investors with exposure to Japanese stocks while mitigating the impact of the yen’s gyrations against the dollar,” wrote InvestorPlace contributor Todd Shriber on Sept. 22.

“Japan makes for one of the ideal markets for currency-hedged ETFs because of the country’s export-driven economy, the world’s third-largest, prefers the yen to be weaker.”

Over the past five years, the DXJ has delivered an annual return of 18%, 300 basis points higher than the S&P 500. In 2008, when the S&P 500 lost 37%, DXJ was off 21%, significantly less than the index.

If I had to pick between a China ETF and a Japan ETF, I’d be more inclined to go with the latter because it’s a developed rather than emerging market.

Source: Investor Place

[winston]

by behappyalways:-

Japan is the 'most under-owned stock market on the planet,' and David Rosenberg says buy it

Source: CNBC

https://www.cnbc.com/2017/10/28/david-r ... arket.html

[winston]

Why Japanese stocks could soar 18% over the next year

by Brett Eversole

Source: True Wealth Systems

http://thecrux.com/why-japanese-stocks- ... next-year/

[winston]

Japanese stocks, long shunned, attract billions of foreign dollars

by Trevor Hunnicutt, Hideyuki Sano

The Nikkei index rose to its highest levels since 1996 despite the yen’s near-3 percent gain, returning 17 percent this year, or 20 percent in U.S. dollar terms, including dividends.

Foreign investors, who largely shunned Japanese stocks on doubts rising corporate earnings would be sustained, bought 4.4 trillion yen ($39 billion) of Japanese stocks and futures during the past six weeks, according to the Tokyo Stock Exchange.

Foreign investors sold 2.4 trillion yen ($21 billion) from mid-July to early September at the height of fears over a confrontation with North Korea.

The ratio of stock prices to earnings expected over the next 12 months is 18.6 in the United States, compared to 15.4 in Japan.

The Bank of Japan (BOJ) aggressively tried to jumpstart its economy over the last several years, buying domestic stock exchange-traded funds (ETF) at a pace of 6 trillion yen ($53 billion) per year.

On Tuesday BOJ Governor Haruhiko Kuroda signaled the chance of slowing ETF buying before embarking on a full-fledged withdrawal of stimulus.

Source: Reuters

http://www.reuters.com/article/us-globa ... US%20Money