TOKYO: Japan continues to rise despite the global gloom. The iShares MSCI Japan ETF (EWJ) dipped 4.5% at the close of September 1, although the Nikkei recently came out with a positive August manufacturing report for Japan. The WisdomTree Japan Hedged Equity Fund (DXJ) also lost 5.6%. However, these Japan-tracking ETFs have returned 4.80% and 2.64%, respectively, on a year-to-date basis as of September 2, 2015. Japanese equity has been outperforming so far this year.
The ADRs (American Depositary Receipts) of Japanese companies Sony (SNE), Mitsubishi UFJ Financial Group (MTU), and Honda Motors (HMC) have returned 24.43%, 16.46%, and 4.37%, respectively, year-to-date.
Nikkei Japan Manufacturing PMI indicates business activity expanding in August.The final reading for the Nikkei Japan Manufacturing PMI, released by Markit Economics, showed improving operating conditions for businesses in Japan. The index came in at 51.7 in August against July’s 51.2.
The report indicates that operating conditions improved in August, with output, new orders, employment, and purchases all recording an increase in August. According to the report, “New order growth accelerated to a seven-month high, while both production and job creation also increased. In contrast, new export orders rose at a slower pace, with reports of reduced trade volumes with China dampening international demand.”
In Japan, new export orders have been gaining on the back of a cheaper yen. The cheaper yen has also helped boost foreign demand for the country’s products. Employment also accelerated, with increased industrial activity to meet export orders.
