Japan’s economy is doing better than it has for years. Its GDP has grown for six consecutive quarters, which is the longest period of sequential growth since the mid-2000s. Household spending also showed annualised growth of 3.7 percent in the last quarter. And capital expenditure in the economy (the amount companies are investing in their businesses) saw annualised 9.9 percent year-on-year growth in the last quarter.
Last week, we got some more good news… the country’s manufacturing confidence just hit its highest level in a decade. In short, sentiment among Japan’s large manufactures is at its highest level since September 2007, according to the quarterly Tankan survey by the Bank of Japan.
With the Japanese economy on its best growth run in a long time, we’re upbeat on Japanese equities, particularly in the small cap sector.
Our August recommendation, the WisdomTee Japan Hedged SmallCap Equity Fund (NASDAQ Exchange; ticker: DXJS) is up over 8 percent so far. But we think there’s plenty more upside to come.
ACTION: BUY the WisdomTree Japan Hedged SmallCap Equity Fund (NASDAQ Exchange; ticker: DXJS) up to US$50 with a 25 percent trailing stop loss.