(Bloomberg) -- Traders are piling into BlackRock’s Japan-focused ETF at the fastest pace in years as the country’s stock market hits multi-decade highs. 

The iShares MSCI Japan ETF (ticker EWJ) has pulled in roughly $1 billion in June, with the bulk of that coming from a $787 million cash influx last week, the biggest weekly inflow in over five years. The fund — whose top holdings include Toyota Motor Corp., Sony Group Corp., and Mitsubishi UFJ Financial Group Inc. — has gained almost 8% month to date as the country’s economic outlook improves.

Options activity suggests traders expect more upside for EWJ. Total call open interest, which measures the amount of bullish options activity, jumped to 218,000 contracts on Monday, the highest since December 2021.  

An improving inflation backdrop, Warren Buffett’s interest in Japanese stocks and the Tokyo Stock Exchange’s push for better corporate governance has propelled the Nikkei 225 Index to the highest levels since 1990. After decades of little to no growth, inflation is picking up in Japan, and the Bank of Japan is set to maintain its ultra-easy monetary stance when it meets later this week.

Read more: The One Stock Market That Loves Inflation Is Booming in Japan

“Japan has a structural story of now-persistent and above-trend growth and inflation, which are leading the long-delayed ‘third arrow’ of Abenomics,” wrote Charlie McElligott, cross-asset macro strategist at Nomura, in a note. “There is a long-awaited story building of a hypothetical (future) Japanese corporate margin expansion, as pricing-power can finally be pushed-down into a very different Japanese consumer, who increasingly has the capacity to absorb it.” 

Year to date, EWJ has raked in $1.8 billion in net flows, which is among the most of other Japan-focused ETFs traded in the US. The JPMorgan BetaBuilders Japan ETF has seen $650 million of inflows, and the Franklin FTSE Japan ETF has taken in $333 million this year.

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