Rocky Japanese ETFs Could Become More Volatile
July 30th at 4:06pm by Tom Lydon
Japan’s economy already has been a dud compared to other Asian countries when it comes to exchange traded fund (ETF) performance, but it might get even worse.
Shinzo Abe, the Japanese prime minister, endured heavy losses in the recent Upper House of parliament elections. Without the backup of his Liberal Democratic Party (LDP) in power, Abe would be highly unlike to pass legislation. While some officials in Japan have called for his resignation, Abe has stated that he will remain prime minister, according to Richard Holt and Simon Scott Plummer for The Telegraph. This defeat could signal a political crisis for Japan, thus putting strain on its economy and ETFs.
iShares MSCI Japan Index (EWJ), CurrencyShares Japanese Yen Trust (FXY) and iShares S&P/TOPIX 150 Index (ITF) already have had an extremely rocky year so far, as you can see from the chart below. We’ll have to wait and see if the recent political events will increase volatility in these ETFs.
