Japan’s exchange traded fund (ETF) iShares MSCI Japan Index (EWJ) already has had tough couple of months. Currently, it’s down 3.7% year-to-date. News that the country’s Prime Minister Shinzo Abe will resign is not likely to help the ETF or the confidence in Japan’s economy.
The Prime Minister has made headlines a few times this year, most recently with his party’s large defeat. In a press conference, Abe said, "In the present situation it is difficult to push ahead with effective policies that win the support and trust of the public. I have decided that we need a change in this situation," according to Chisaki Watanabe for the Associated Press.
This recent announcement reminds ETF investors that one of the drawbacks to investing abroad is that the foreign-based ETFs tend to react stronger to positive and negative political news and events.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.