Why Japanese Equities Will Continue to Run

In December 2014, I detailed why the iShares MSCI Japan ETF (NYSEMKT: EWJ), a proxy for participating in Japanese equities, was a timely purchase for investors. In the roughly three years since, although the stock endured a volatile period between mid-2015 and mid-2016, the fund's shares have posted a cumulative total return of roughly 33%. Twenty-three of those percentage points were notched year to date, a period in which the Nikkei 225 and TOPIX (Tokyo Stock Price index) averages have been among the best-performing major stock indices worldwide.

Let's review a few performance factors fueling the rise of Japanese stocks, and examine why their streak may continue for a few years yet.

In my initial overview of the Japanese market, I discussed three potential impacts from Abenomics, the broad set of measures instituted by Prime Minister Shinzo Abe's government to pull the world's third-largest economy out of its low-growth, deflationary conditions:

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Source: Fool.com