Jasmine Birtles
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The Best Japan ETFs to Buy in 2025
Ruby Layram
23rd May 2025
Looking to add a splash of international flavour to your investment portfolio? Japan could be just the ticket, and you don’t have to book a flight to Tokyo to do it. With Japan ETFs (exchange-traded funds), you can invest in some of the world’s biggest and best-run companies with just a few clicks.
In this article, we’ll explain why Japan is an exciting opportunity in 2025, how to invest in Japan ETFs as a UK investor, and which funds are looking the most promising right now.
Why Invest in Japan ETFs in 2025?
Japan has been something of a sleeping giant in global markets, but that’s starting to change. In recent years, corporate reforms, a focus on shareholder returns, and a tech-led boost in productivity have made Japanese companies more attractive than they’ve been in decades.
Here’s why Japan is catching investors’ attention:
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Strong corporate governance: Many Japanese companies are now more focused on profitability and returning value to shareholders.
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Cheap valuations: Compared to US stocks, Japanese shares are still relatively inexpensive, which could mean more room for growth.
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Weaker yen = stronger exports: A weaker yen helps Japanese exporters thrive, particularly in areas like technology, cars, and machinery.
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Diversification: Investing in Japan offers exposure to a mature but unique economy, which can balance out portfolios heavily tilted toward the UK or US.
The Best Japan ETFs to Buy in 2025
Here are some of the top Japan ETFs worth considering in 2025, based on performance, popularity, and how they manage risk:
iShares MSCI Japan ETF (EWJ)
EWJ is one of the largest and most well-known Japan ETFs out there.
It tracks the MSCI Japan Index, giving you broad exposure to large and mid-cap companies in Japan. Think big players like Toyota, Sony, and Mitsubishi. With high liquidity and a solid track record, it’s a go-to option for many global investors looking for one-stop Japan exposure.
WisdomTree Japan Hedged Equity Fund (DXJ)
Worried about currency risk? DXJ might be the one for you. It provides access to Japanese equities while actively hedging against fluctuations in the yen.
This is especially helpful if the pound strengthens or the yen weakens, your investment stays steady, and you’re not at the mercy of forex movements.
iShares JPX-Nikkei 400 ETF (JPXN)
If you’re after companies with good governance and consistent profits, JPXN could be a smart pick. It tracks the JPX-Nikkei 400 Index, which screens for companies with strong financials, return on equity, and investor-focused behaviour.
It’s a great way to focus on the cream of the Japanese crop.
iShares Currency Hedged MSCI Japan ETF (HEWJ)
HEWJ is very similar to EWJ but includes currency hedging. It offers broad exposure to Japan’s equity market while aiming to remove the volatility caused by currency swings. If you’re a cautious investor looking for growth without unnecessary surprises, this could be a safer bet.
Franklin FTSE Japan ETF (FLJP)
This one’s perfect if you like low fees and simple, effective investing. FLJP tracks a broad index of Japanese large and mid-sized companies and comes with a very competitive expense ratio. It may not have all the bells and whistles, but it does the job and keeps more money in your pocket.
How to Invest in Japan ETFs as a UK Investor
Investing in Japan ETFs from the UK is easier than ever. Here’s how you can get started:
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Open a Stocks & Shares ISA or general investment account: Platforms like Invest Engine, Hargreaves Lansdown, Freetrade, Interactive Investor or eToro let you invest in overseas ETFs, often with no hassle.
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Search for the ETF by ticker or name: For example, search “EWJ” or “iShares MSCI Japan ETF” in your chosen platform. If it’s a US-listed ETF, make sure your platform gives access to US markets.
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Consider currency impact: If you’re investing in a non-GBP ETF, check if it’s hedged (like DXJ or HEWJ) or not (like EWJ). Currency swings can boost or drag down your returns.
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Watch out for fees: Look at the platform’s trading costs, foreign exchange fees, and the ETF’s own management fees.
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Hold within a tax wrapper if possible: Using a Stocks & Shares ISA helps protect your investment from capital gains tax and dividend tax.
Final Thoughts
Japan is quietly having a moment. With strong reforms, reasonable stock prices, and a shift towards rewarding shareholders, the country’s markets are attracting smart money again. If you’re looking to broaden your portfolio in 2025, a Japan ETF could be a great place to start.
As always, do your research, check the small print, and make sure the investment fits your personal goals and risk appetite. You don’t need to go all-in, but a small slice of Japan might just give your portfolio the edge it’s been looking for.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies, are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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