iShares JPX-Nikkei 400 Price, Forecast, Insider, Ratings, Fundamentals & Signals

Japan ETFs have been surging over the past year on several factors and beating the S&P 500.

Things were looking tough for the BoJ as recently as this summer, when the country's core CPI bolted north of 4%, far beyond the 2% inflation target that major central banks view as ideal. The Bank of Japan is being reactive to an inflation threat that may very well be in the rearview mirror.

The debate over the future of Japan continues. Because of its small footprint, we often forget the oversized role Japan plays in the global economy.

The IMF, the World Bank, and the United Nations all rank China and Japan as the second and third largest economies on the planet. More of what is occurring in the markets should reflect what is happening in China and Japan which are strongly linked economically.

It is disappointing that labour cash earnings were weaker than expected in Japan, but consumption held up relatively well. Meanwhile, due to the recent spike in market rates and high inflation, the Bank of Japan is expected to change its YCC policy and forward guidance at its October meeting.

We discuss the potential of investing in the Japanese stock market, particularly through BlackRock's iShares JPX-Nikkei 400 ETF, which tracks the Nikkei Index and holds 393 companies. The Japanese economy has lower inflation than many other large OECD economies and a low unemployment rate but faces a demographic challenge with a declining birth rate and insufficient immigration. The gap between JPXN and SPY could narrow as institutional investors potentially move more of their portfolio to the equity market, but there may be impact from changes in foreign exchange.

Japan's Nikkei 225 eclipsed 33,000 for the first time in 33 years, and the significant rally has attracted major investor interest. Global portfolio managers are increasingly bullish on Japan, and they are allocating more cash to this rising market.

The crisis at Credit Suisse has traders wondering who's next. Japanese lenders, with their staid depositor bases, look like unlikely targets for bank runs.

Business prospects for the year ahead rose in January to the highest since comparable data were first available in 2012, as looser COVID-19 restrictions in mainland China fuelled expectations of faster economic growth. January saw business confidence hit an all-time high.

We expect Japan's GDP growth to slow in 2023 but to remain above its potential rate, supported by an accommodative macro policy environment. The near-term outlook is bleak due to high inflation and weak global demand conditions.