Dallas, Texas 12/13/2013 (FINANCIALSTRENDS) – After the announcement made by the Japanese government about the possible spending package the iShares MSCI Japan Index (ETF) (NYSEARCA:EWJ) took a positive turn. In fact all the Japanese markets and the concerned exchange traded funds also strengthened up a bit. The stimulating package that have been decided by the government is believed to be around multi-trillion yen and is aimed at reducing the prolonged period of overall deflation.
If we talk about the stimulating package in dollar terms then its value can be calculated around $54 billion. The Prime Minister Shinzo Abe also said that with this stimulation package and other economic support measures we will be able to decrease the deflation trend and the economy will also come on tracks. This stimulus package is a part of the Abe’s three arrows that is trying to control the deflation under his so called Abenomics plan.
Impact of the package in the economic conditions
As per the industry sources the stimulus and other economy building measures could translate to a great impact on the economy and the entire GDP might get an increase of over a one percentage point.
Moreover the Japanese government is also trying to cut the corporate tax to 35.64% from 38.01% during the next spring season so that corporate wage growth can be promoted. In the recent years the corporate wage growth has also slowed down and the Japanese government wants it to increase further so that the people also remain happy. Now as the Yen’s value is weakening the investors can also try to invest into Yen currency hedged equity funds such as ishares MSCI Japan Index (ETF) and make more money. The idea is to invest wisely and pick up the right sector for the investment.
