JPMorgan BetaBuilders Japan ETF

BBJP

Market cap $15B

Nikkei 225 hits 59,000 as BOJ dovish bets and a tech surge ignite Japan stocks - here's why ETFs like EWJ are in focus now.

Japan's Nikkei 225 hits a record as Sanae Takaichi's election win fuels stimulus hopes, lifting investor appetite for Japanese ETFs like EWJ.

The rate check demonstrates yet another tool in the intervention toolbox that can keep the JPY from falling too far amid opposing monetary and fiscal objectives. While it may be essential for the Japanese government to prevent issues with their increasingly marginal currency, it's a net negative for an export led index, such as the one that JPMorgan BetaBuilders Japan ETF tracks. Japanese valuations are also closer to the upper range of the PE ratio range in the last 10 years.

Nikkei 225 struggles below 50,000 as upside momentum fades. Daily RSI drifts into neutral territory, signaling consolidation.

The Nikkei 225 falls to 49,303 as rate-hike odds for December 19 approach 80%. Electronics, pharma, and industrials lead declines as liquidity expectations tighten.

JPMorgan BetaBuilders Japan ETF tracks the Morningstar Japan Target Market Exposure Index and provides exposure to 190 Japanese stocks, most of which are giant and large caps. BBJP has been taking share from its larger peer EWJ, and we examine what is driving this. Despite BBJP's advantages against EWJ, its valuations are not cheap when measured against developed markets.

Nikkei closes at 51,063, extending gains for a second session. Manufacturing confidence hits a four-year high as exports strengthen.

ETFs that buy Japanese stocks were rallying Monday, adding to their surge this year, after the weekend election of Sanae Takaichi to lead Japan's Liberal Democratic Party put her on track to become the country's next prime minister.

Solid growth and ongoing shareholder-friendly reforms are driving Japanese equity gains, keeping us overweight. We see the AI theme playing out globally.

I prefer BBJP over EWJ for its lower expense ratio and similar sector exposures, making it a more efficient Japan ETF choice. Tariff risks threaten Japan's export-heavy sectors, especially autos and industrials, despite some natural hedging benefits from an also weakening Yen. These natural hedging benefits are affected by the significant US exposure in geographic mixes, but also the likelihood of harsher competition in remaining markets under reconfigured trade flows.