We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Japan ETFs Suffer as it Declares State of Emergency?
Read MoreHide Full Article
The world’s third largest economy, with more than 4,200 confirmed coronavirus cases, has declared a state of emergency from Apr 7 that will last until May 6. Prime Minister of Japan, Shinzo Abe, announced the state of emergency in the capital Tokyo and six other prefectures — Chiba, Kanagawa and Saitama, the western hub of Osaka, and neighboring Hyogo, and the southwestern region of Fukuoka. Together, these all make about 44% of Japan's population and represent about half of the nation’s economy.
Abe also informed that Japan might see as many as 80,000 confirmed COVID-19 cases in a month if no appropriate initiative is taken as he declared a state of emergency. Moreover, if social-distancing measures are undertaken with a success rate of at least 70% or 80%, the increase in infections can peak-out in Japan in two weeks (according to experts’ calculations). With the emergency declaration, local officials will have the right to take initiatives like ordering the cancellation of events, limiting use of facilities, such as schools and movie theatres, and allowing land or buildings for usage as temporary medical facilities.
Meanwhile, in order to combat the coronavirus pandemic, Japan has rolled out a massive stimulus package worth 108 trillion yen ($990bn) or equivalent to 20% of the nation’s economic output.
Impact of State of Emergency on Economy
The declaration of the state of emergency has raised concerns regarding the output that is expected to decline by as much as 20% in the current quarter. Consumer spending will likely be hit by roughly $23 billion, along with a 0.4% decline in Japan’s annual GDP due to the declaration of the state of emergency (per a recent report by an analyst at Nomura Research Institute). In addition, economists at Goldman Sachs expect that Japan’s economy during the emergency could shrink 25% this quarter. Moreover, the analysts project a 60% decline in exports in the quarter.
ETFs in Focus
Against this backdrop, investors can keep a tab on Japan ETFs like iShares MSCI Japan ETF (EWJ - Free Report) , JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) , Franklin FTSE Japan ETF (FLJP - Free Report) , WisdomTree Japan SmallCap Dividend Fund (DFJ - Free Report) and iShares MSCI Japan Small-Cap ETF (SCJ - Free Report) .
This fund tracks the investment returns of the Morningstar Japan Target Market Exposure Index. It comprises 375 holdings. The fund’s AUM is $2.41 billion, while its expense ratio stands at 0.19% (read: Japan ETFs to Shine as IMF Lifts Economic Outlook for 2020).
DFJ
This fund tracks the investment returns of the WisdomTree Japan SmallCap Dividend Index. It consists of 780 holdings. The fund’s AUM is $224.2 million and the expense ratio, 0.58%.
FLJP
The fund tracks the performance of the FTSE Japan Capped Index. It comprises 506 holdings. The fund’s AUM is $313.9 million and the expense ratio, 0.09%.
SCJ
The fund tracks the MSCI Japan Small Cap Index. It comprises 971 holdings. The fund’s AUM is $63.7 million and the expense ratio, 0.49%.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Japan ETFs Suffer as it Declares State of Emergency?
The world’s third largest economy, with more than 4,200 confirmed coronavirus cases, has declared a state of emergency from Apr 7 that will last until May 6. Prime Minister of Japan, Shinzo Abe, announced the state of emergency in the capital Tokyo and six other prefectures — Chiba, Kanagawa and Saitama, the western hub of Osaka, and neighboring Hyogo, and the southwestern region of Fukuoka. Together, these all make about 44% of Japan's population and represent about half of the nation’s economy.
Abe also informed that Japan might see as many as 80,000 confirmed COVID-19 cases in a month if no appropriate initiative is taken as he declared a state of emergency. Moreover, if social-distancing measures are undertaken with a success rate of at least 70% or 80%, the increase in infections can peak-out in Japan in two weeks (according to experts’ calculations). With the emergency declaration, local officials will have the right to take initiatives like ordering the cancellation of events, limiting use of facilities, such as schools and movie theatres, and allowing land or buildings for usage as temporary medical facilities.
Meanwhile, in order to combat the coronavirus pandemic, Japan has rolled out a massive stimulus package worth 108 trillion yen ($990bn) or equivalent to 20% of the nation’s economic output.
Impact of State of Emergency on Economy
The declaration of the state of emergency has raised concerns regarding the output that is expected to decline by as much as 20% in the current quarter. Consumer spending will likely be hit by roughly $23 billion, along with a 0.4% decline in Japan’s annual GDP due to the declaration of the state of emergency (per a recent report by an analyst at Nomura Research Institute). In addition, economists at Goldman Sachs expect that Japan’s economy during the emergency could shrink 25% this quarter. Moreover, the analysts project a 60% decline in exports in the quarter.
ETFs in Focus
Against this backdrop, investors can keep a tab on Japan ETFs like iShares MSCI Japan ETF (EWJ - Free Report) , JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) , Franklin FTSE Japan ETF (FLJP - Free Report) , WisdomTree Japan SmallCap Dividend Fund (DFJ - Free Report) and iShares MSCI Japan Small-Cap ETF (SCJ - Free Report) .
EWJ
This fund tracks the investment returns of the MSCI Japan Index. It comprises 323 holdings. The fund’s AUM is $8.82 billion and expense ratio, 0.49% (read: Is it the Right Time to Invest in Beaten-Down Japan ETFs?).
BBJP
This fund tracks the investment returns of the Morningstar Japan Target Market Exposure Index. It comprises 375 holdings. The fund’s AUM is $2.41 billion, while its expense ratio stands at 0.19% (read: Japan ETFs to Shine as IMF Lifts Economic Outlook for 2020).
DFJ
This fund tracks the investment returns of the WisdomTree Japan SmallCap Dividend Index. It consists of 780 holdings. The fund’s AUM is $224.2 million and the expense ratio, 0.58%.
FLJP
The fund tracks the performance of the FTSE Japan Capped Index. It comprises 506 holdings. The fund’s AUM is $313.9 million and the expense ratio, 0.09%.
SCJ
The fund tracks the MSCI Japan Small Cap Index. It comprises 971 holdings. The fund’s AUM is $63.7 million and the expense ratio, 0.49%.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>