Japanese ETFs to Buy as Nikkei 225 Crosses New Record High

The Japanese equity market is capturing global headlines as the Nikkei 225 surged to a historic milestone, crossing a record high of 59,000 for the first time on Feb. 25, 2026. This milestone underscores how renewed optimism surrounding Japan’s economy and corporate sector is spilling over into equities, firmly placing the spotlight on the “Land of the Rising Sun.”

For investors, this momentum underscores the growing appeal of Japanese stocks, making Exchange-Traded Funds (ETFs) that hold these equities an increasingly compelling way to tap into the country’s industrial revival and technological strength.

Before highlighting a few Japanese ETFs for your portfolio, let us take a closer look at the factors behind this record high and the market’s prospects, enabling you to make a well-informed decision.

What's Driving the Record-Breaking Rally?

The primary catalyst behind this rally is what market participants call the "Takaichi trade." Japan’s prime minister Sanae Takaichi's recent nominations to the Bank of Japan’s (BOJ) policy board have reinforced expectations of a prolonged accommodative monetary stance. The appointment of two academic experts, Ayano Sato and Toichiro Asada, signals a continuation of growth-oriented, reflationary policies, as both are viewed as advocates of lower interest rates, a weaker yen and sustained stimulus.

Their nominations align with Sanae Takaichi’s pro-growth agenda, which includes plans for fiscal spending and tax relief aimed at bolstering domestic demand and corporate profitability.

This domestic policy tailwind is being reinforced by strong global forces. A tech-led rally on Wall Street, powered by yesterday’s blockbuster earnings from NVIDIA NVDA, boosted sentiment across Asian tech supply chains. In Tokyo, the Topix Information & Communication index climbed sharply, with heavyweight names like SoftBank Group and chip-related suppliers seeing significant gains. 

This combination of loose monetary policy at home and robust global demand for technology stocks created a perfect storm for the Nikkei to cross the new record high.

Market Outlook and the Case for ETFs

The outlook for Japanese equities remains overwhelmingly bullish. J.P. Morgan Global Research has highlighted in its 2026 market outlook that the economic policies of Takaichi and corporate reforms will likely propel Japanese equities this year. 

In a similar line of thought, Morgan Stanley analysts expect Japan’s equity market to see meaningful upside, noting that it has further room to run this year, as Takaichi’s administration encourages companies to reduce excess cash holdings — a move likely to lift return on equity (ROE) for Japanese stocks.

Given the optimistic outlook for Japan’s equity rally and the complexity of company-level reforms, broad-based ETFs may offer a more prudent approach than selecting individual stocks.

These ETFs will offer you instant diversification across the sectors driving the Nikkei's gains —from financials and industrials to the booming tech sector — while mitigating the risk of a single company's underperformance.

Japanese ETFs in Spotlight

Considering the aforementioned discussion, investors looking to capitalize on the Japanese equity market's momentum may add the following ETFs to their portfolios:

iShares MSCI Japan ETF EWJ 

This fund, with net assets worth $20.12 billion, offers exposure to 181 large and mid-sized companies in Japan. It traded at a good volume of 6.05 million shares in the last trading session. 

EWJ has rallied 14.5% year to date and 1.3% in the last trading session. It charges 49 basis points (bps) as fees and holds a Zacks ETF Rank #2 (Buy).

JPMorgan BetaBuilders Japan ETF BBJP 

This fund, with net assets worth $16.07 billion, offers exposure to 180 stocks traded primarily on the Tokyo and Nagoya Stock Exchanges. It traded at a volume of 0.71 million shares in the last trading session. 

BBJP has soared 14.5% year to date. It went up 1.2% in the last trading session. It charges 19 bps as fees and holds a Zacks ETF Rank #2.

Franklin FTSE Japan ETF FLJP

This fund, with net assets worth $3.17 billion, offers exposure to 487 Japanese large and mid-capitalization stocks. It traded at a volume of 0.39 million shares in the last trading session. 

FLJP has rallied 14.9% year to date and 1.2% in the last trading session. It charges 9 bps as fees and holds a Zacks ETF Rank #2.

WisdomTree Japan Opportunities Fund OPPJ   

This fund, with net assets worth $225.7 million, offers exposure to 118 small, mid and large-cap Japanese stocks. It traded at a volume of 0.07 million shares in the last trading session. 

OPPJ has rallied 24.1% over the past year and 1.7% in the last trading session. It charges 58 bps as fees and holds a Zacks ETF Rank #2.

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