EWJ Should Benefit From A China Reopening

Valkyrie Trading Society
Investing Group Leader

Summary

  • The reopening of China is going to help the toplines of a lot of Japanese businesses with Chinese wallet share, especially industrial businesses.
  • Moreover, a still cheap Yen could continue to revalue as energy is put back into Chinese import activities.
  • The problem is, if the Chinese reopening doesn't work out, EWJ investors are stuck with a lot of consumer discretionary exposures and a high multiple ETF.
  • There is so much low-hanging fruit in Japanese markets with very safe balance sheets. Buying an ETF for Japan is such a waste when stock picking can go such a long way.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

Dotonbori Canal at sunset, Osaka, Japan

Eloi_Omella/E+ via Getty Images

The iShares MSCI Japan ETF (NYSEARCA:EWJ) shows a very representative slice of the Japanese economy. What a lot of these stocks have in common is that they have a pretty substantial wallet share in China, especially the

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This article was written by

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The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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