Since the global market lows of Aug. 15, most world markets and their corresponding exchange traded funds (ETFs) have posted double-digit returns. Many emerging market and BRIC countries are up between 20 and 30%. However, Japan’s ETFs are severely lagging over the same period. Since Aug. 15, iShares MSCI Japan Index (EWJ) is up 5.9%, and iShares S&P/TOPIX 150 Index (ITF) is up 6.7%.

Perhaps one of the reasons behind the ETFs’ slow rebound is the country’s new economic challenges. The Bank of Japan Governor said recently that raising the interest rate could create risks for Japan’s export-driven economic growth. He was especially worried that an interest rate increase could increase the chance that a further U.S. economic slowdown would impact Japan’s already skittish financial markets, reports Leika Kihara for Reuters.


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.