After four consecutive quarters of declining GDP, Japan’s recession is over.

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The world’s second largest economy reported that Q2 GDP grew an annualized 3.7% on the strength of exports and government stimulus spending.

The largest exchange traded fund focused on Japan is the iShares MSCI Japan Index Fund (EWJ) which tracks an index that effectively captures 85% of the total market capitalization of the Japanese equity market.  Top holdings include Toyota MotorMitsubishi UFJHonda Motor andCanon.  The $6 billion ETF carries an expense ratio of 0.52% and a yield of 1.55%.

Other Japan ETFs available to US investors include the PowerShares FTSE RAFI Japan Portfolio (PJO) and WisdomTree Japan Total Dividend Fund (DXJ).

The AP reports that the recovery in the April-June quarter was driven by robust demand for cars, video recorders and other electronics goods, according to government data. Shipments to China and other emerging markets were particularly strong, although exports to the U.S. and Europe also showed modest recoveries. Exports grew 6.3 percent from the previous quarter, the highest rate in seven years.

Government stimulus measures have also helped, such as cash handouts and incentives to buy ecological products.

However, the AP story also notes economists and politicians sounded cautious, noting that the main driver of growth was exports and that domestic consumer spending remained fragile amid plunging incomes and rising unemployment.

Salaries are falling and the unemployment rate has risen to a six-year high of 5.4 percent as companies such as Toyota Motor Corp. and Sony Corp. have cut thousands of jobs.

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