Japan Index Fund Essay

490 words - 2 pages

When we talk about Japan we think of one of the most affluent technological and industrial leaders in the world. We think of high-end electronics and highly educated and expertly trained professionals. Throughout the last few years, financial eyes have been on the Japanese stock market as it slowly makes its economic recovery. “Japan’s stock market has been locked in a bear market since 1989,” (Waggoner, 2004) hitting its peak in January 1990. In 2003, the Tankan survey found that “business confidence had weakened” with much of the blame on rising oil prices and a stronger yen. Despite all of this, their stocks have risen 12.4% in 2004 while unemployment fell. Financial analysts also reported that Tokyo’s real estate prices were rising.BBC News reports “Japan owes its change in fortune to booming export demand from China.” Toyota, who gets most of its sales from the United States have been seeing higher revenues. To follow through with this positive swing, in March of 2004 Moody raised Japans debt rating to AA+.In 1990 the Japanese yen was valued at 160 yen to the US dollar. By 1995 it peaked at 80 yen to the US dollar and is currently at 111 yen. In July of 2005, Forbes announced that the Japan Stock market was trading at a 17-year high. Investors speculate that the stock market will “continue to outperform the US and most European markets” and the economy will expand moderately. (Hutchinson, 2004)The Japan Index Fund (NYSE:EWJ) can easily be found on Yahoo! Finance. The fund’s, which is listed number 13 on Yahoo’s! top 20...

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