Ride Japan's Success with the EWJ

The iShares MSCI Japan Index (ETF) (NYSE:EWJ) could be set for a rise thanks to Japan's exports numbers coming in today at a 40.4% increase on year in April.

THE TRADE - EWJ
iShares MSCI Japan Index Fund (the Fund) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Japan Index (the Index). The Index seeks to measure the performance of the Japanese equity market. It is a capitalization-weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion to the Index.  The EWJ closed at $9.43 today, its 52-week range is from $9.10 to $10.71.

THE REASON - JAPAN KEEPS RISING UP
(WSJ.com) It was the fifth straight month of increase for Japan giving the nation's export-led economic recovery a forceful nudge. The brisk exports pumped up the nation's trade surplus 15-fold to Y742.3 billion from Y48.9 billion in the same month a year earlier, the Ministry of Finance data showed.

Export growth was almost exactly in line with a Dow Jones Newswires poll of economists, who forecast a 40.5% increase. The surplus--the margin by which exports exceed imports--beat expectations for Y709.3 billion.

The data indicate Japan's economy is off to a strong start in the April-June quarter, after expanding at a solid 4.9% annualized rate in the previous three months.  Japan's economic prospects are still under threat from Europe's debt turmoil and consequent rises in the yen. But the continuing signs of economic improvement may give some relief to Prime Minister Yukio Hatoyama's government, which is working to shore up diminishing popularity before a planned Upper House election in July.

Exports have grown more than 40% on year every month since January, providing crucial support to an economy in which domestic demand is still heavily dependent on stop-gap government support. Auto exports to the rest of the world jumped 103.1% on year in April, retaining their momentum from the 110.8% surge in March, the highest since 1980 when comparable data were first made available. Auto exports increased 105.0% in February.

U.S.-bound car shipments rose 105.3% on year in April, the data showed, an indication that Toyota's massive recalls in recent months have done little to damp overall demand for Japanese cars.