Japan ETFs: Abe's Win Extends 'Abenomics' Outlook

Japanese markets and country-specific ETFs may continue to strengthen under favorable economic policies after Prime Minister Shinzo Abe’s ruling bloc secured a supermajority in Japan’s parliamentary elections.

The iShares MSCI Japan ETF (NYSEArca: EWJ), the largest Japan ETF, rose 0.4% Monday after the Sunday election.

“Prime Minister Shinzo Abe’s party scored a solid victory in Japan’s general election, likely extending the lifespan of ‘Abenomics,’ including the Bank of Japan’s mega stimulus,” according to a BlackRock note.

Public broadcaster NHK announced that Abe’s Liberal Democratic Party and its smaller coalition partner, Komeito, received at least 312 seats of the 465-seat House of Representatives, reports Adam Taylor for the Washington Post.

“This is a win for Abe,” Sheila Smith, a Japan expert at the Council on Foreign Relations, told the Washington Post, adding that the supermajority showed “a real endorsement of Abe’s leadership.”

With the country backing Abe’s party, the economy may expect an extension on the so-called Abenomics reflationary policy, which includes aggressive central bank and government policies that helped lift the Nikkei Stock Average to 22-year highs.