Lower demand for goods have put a strain on many countries, and decline in trading has Japan’s economy, along with its subsequent exchange traded fund (ETF), close to what may look like its worst postwar recession.

In January, Japan posted a current account deficit of $1.8 billion because of faltering exports, reports Keiko Ujikane for Bloomberg. Exports deteriorated 46.3% in January compared to the same month last year, after droping 35.1% in December. Imports also fell 31.7% with a 21.2% decline for the previous month.

Last year’s yen appreciation against the dollar cut away at the value of export sales, which only worsened conditions for domestic companies. A report has shown that corporate bankruptcies grew by 10.4% in February. Seeing the yen weaken would ease some of the problems for the country, which is now gripped by a recession.

The Nikkei 225 Stock Average slipped to a 26-year low of 7,086.03 this week. The Bank of Japan has stated that the economy is deteriorating faster than previously anticipated.

Japan’s Parliament has approved a $50.9 billion stimulus spending plan in hopes of allaying the economic pains.

  • iShares MSCI Japan Index (EWJ): down 11.6% in the last month; down 19.8% in the last three months

ETF EWJ performance

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.