EWJ gives you the entire Japanese stock market in one trade — from Toyota to Nintendo to SoftBank. It's the simplest way to bet on Japan's corporate sector without picking individual winners.
How It Works
Tracks the MSCI Japan Index, which includes about 85% of Japan's publicly traded market cap across large and mid-cap companies. Market-cap weighted, so mega-caps like Toyota and Sony dominate. Rebalances quarterly and holds roughly 240 stocks. Crucially, this is unhedged — you're taking full yen exposure alongside your equity bet.
Key Features
- Pure yen exposure amplifies or dampens returns based on currency moves
- Dirt cheap at near-zero expense ratio for developed market exposure
- Most liquid Japan ETF with tight spreads and massive daily volume
Risks
- Yen weakness can erase stock gains — lost 15%+ from currency alone in 2022
- Tech and auto sectors dominate, making it a concentrated cyclical bet
- Japan's demographic headwinds create persistent low-growth risk
Who Should Own This
Perfect for investors who want both Japanese equities AND believe the yen is undervalued — you're making two bets here. Also works for traders playing BOJ policy shifts or as a portfolio diversifier for US-heavy allocations. Skip this if you just want Japanese stock exposure without the currency roller coaster — use a hedged version instead.