Japan’s core inflation (excluding food) increased for the fifth straight month in May 2017. It grew 0.4% in the month compared with 0.3% in April. This was the fastest rise in more than two years, but it still remains far from the Bank of Japan’s 2% target rate

Japan’s GDP grew 0.3% sequentially in the first quarter of 2017, at the same rate as the previous quarter. Consumer confidence improved marginally to 43.6 in May compared with 43.2 in April, while the business confidence index increased to 12 in the first quarter of 2017 compared with 10 in the fourth quarter of 2016.

Although the country’s unemployment rate increased to 3.1% in May compared with a 2.8% increase in April, the participation rate recorded a nine-year high, as it surged to 60.8% in May compared with 60.3% in April. Moreover, Japan’s job to applicant ratio touched a 43-year high, recording 1.49 in May compared with 1.48 in April.

However, the country’s industrial production declined 3.3% in May compared with the previous month. This clouds the country’s growth outlook. Moreover, the uncertain path of oil prices adds to the agony.

Moreover, Japan’s household spending declined 0.1% year over year in May, showing signs of subdued wage growth.

Let us now discuss a few ETFs focused on providing exposure to Japan (see all Asia-Pacific (Developed) ETFs here).

WisdomTree Japan Hedged Equity Fund (DXJ – Free Report)

This fund is suitable for investors looking for a broad-based exposure to the Japanese economy. It seeks to invest in dividend-paying companies with an export tilt.

The fund has AUM of $8.30 billion and charges a fee of 48 basis points a year. From a sector look, Consumer Discretionary, Industrials and Information Technology are the top three allocations of the fund, with 23%, 20% and 14% exposure, respectively. Toyota Motor Corp, Mitsubishi UFJ Financial Group and Japan Tobacco Inc are the top three holdings of the fund, with 5.01%, 3.93% and 3.89% exposure, respectively (as of June 29, 2017). It has returned 5.6% year to date and 37.83% in the last one year (as of June 29, 2017). As such, DXJ currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.