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.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.