iShares MSCI Japan Value ETF

EWJV

Market cap $497M

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.

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

Keep Japanese ETFs like EWJ, DXJ, and EWJV in your watchlist as investors pivot from volatile U.S. markets to Japan's surging equities.

Despite a narrower mandate, EWJV's expense ratio is 0.15% against the 0.5% for broader EWJ. However, EWJV is more indexed to financials and less indexed to IT which is an export-led market as well, particularly in semiconductors. With the political reality in Japan threatening the Yen, we'd rather export led exposures right now.

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

Berkshire's higher stakes in Mitsubishi and Mitsui spark a rally in Japan's trading houses. ETFs like FJP, EWJV, DFJ, SCJ, FLJH are likely to benefit.

iShares MSCI Japan Value ETF's sector selection, with heavy financials and export-oriented industries, increases vulnerability to yen weakness and U.S. tariffs. Upcoming Japanese elections and potential stimulus could further weaken the yen, linked also to raising rates hurting equities. A weaker yen could be worsened by a reignited carry trade, and financials have the most to lose here with little foreign FX inflows as a hedge.

Bessent's meeting with Japanese officials signals potential strategic moves related to US-JPY Forex matters. The Yen's year-to-date strengthening enhances currency return benefits, making Yen-denominated investments more attractive. EWJV is the value orientated version of iShares EWJ with a higher dividend yield.

US markets are at all-time highs, prompting me to seek undervalued opportunities, leading me to take a mental trip to Japan. My previous Japanese investments have yielded great returns as the Nikkei rose. Now, I'm analyzing the iShares MSCI Japan Value ETF to see if it still holds any value. As EWJV holds mostly financial and automobile companies, the current valuation doesn't look attractive.

As the global private equity industry took tentative steps toward recovery in 2024, Japan raced ahead. The value of private equity investment in Japan jumped nearly 41% over the prior-year total in 2024, far outpacing the 25% year-over-year gain in global private equity deal value, according to S&P Global Market Intelligence data.