3 Funds To Gain From Japan's Economic Resilience

Japan has exhibited economic resilience amid downturns. The country’s retail sales surged last December. Further, Japan’s fourth-quarter 2018 GDP also nudged higher, following a sharp decline in the previous quarter.

Further, the unemployment rate is near a four-decade low. Also, the influx of money into the economy in the form of business and capital spending coupled with business-friendly economic and monetary policies has been pivotal in boosting Japan’s economic growth.

Such developments indicate that Japan’s economy is treading on a steady path. Under such circumstances, investing in mutual funds that track companies domiciled in Japan seems prudent.

Japan’s Q4 GDP Rebounds

Per the latest reports from Japan on Feb 13, the country’s GDP increased at an annualized rate of 1.4% in the fourth quarter of 2018. Such growth followed a contraction of 2.6% in the July-September quarter of last year. Further, economists had expected the GDP to grow only 1.2% in the period between October and December.

Notably, private consumption increased by 0.6% in the period, buoyed by an increase in household spending on traveling and eating out. Private consumption accounts for more than half of the country’s economy. Further, capital expenditure for the period also increased by 2.4%, boosted by impressive corporate earnings.

Consumer Spending Boosts Japan’s Retail Sales

Retail sales of the world’s third-largest economy increased by 1.3% in the month of December. Such gains were buoyed by increased spending on consumer products like home appliances and clothes. The median estimate for the month was meager 0.8% growth.

Moreover, retail sales are an important indicator of the health of the Japanese economy. This is because private consumption directly impacts the metric and accounts for about 60% of the total Japanese economy.

3 Best Fund Choices

We have, thus, selected three Japan mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.

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