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Nikkei 225 Is A Better Value Than S&P 500

Apr. 02, 2021 2:21 AM ETFLJH, HJPNX, EWJ
James Brender profile picture
James Brender


  • The Nikkei 225 is trading at a lower P/E ratio than the S&P 500 despite stronger earnings growth and a lower interest rate environment.
  • Although real GDP growth in Japan has lagged the U.S., corporate earnings in Japan have been stronger.
  • Reversal of the recent strengthening of the U.S. dollar would be a windfall for U.S. investors in Japanese equities.
Kabukicho red light district, Shinjuku, Tokyo, Japan
Photo by Matteo Colombo/DigitalVision via Getty Images

Adding a position in Japanese equities could provide meaningful diversification and boost your portfolio’s return. Japan has generally been out of favor with foreign investors. This sentiment stems from its extraordinarily poor performance during “The Lost Decade,” which began in

This article was written by

James Brender profile picture
I am a retail investor with a background in institutional credit risk. I'm seeking to find companies with attractive fundamentals and a reasonable valuation.

Analyst’s Disclosure: I am/we are long HJPNX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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