Japanese Stocks Get Hammered Again as Investors Beg for More Stimulus

japanese GDP growthThe largest Japanese exchange traded fund, the iShares MSCI Japan ETF (NYSE:EWJ), was falling Wednesday morning, as Japan’s Nikkei 225 index got hammered to the tune of -1.88% overnight.

The drop was likely continued fallout from Japan’s weaker-than-expected government stimulus measures. The Bank of Japan has struggled for years trying to determine appropriate interest rate and stimulus policy as it attempts to stimulate the struggling Japanese economy.

How anemic is Japan’s growth? Just take a look at a 10-year chart of the quarterly GDP numbers:

japan-gdp-growth-10yr
Chart: TradingEconomics.com

Japan’s GDP growth has averaged just a 0.48% annualized rate since 1980. Without much expansion to speak of, Japanese markets have depended solely on governmental stimulus measures to prop up its stock market. The Bank of Japan recently noted it would double its domestic ETF purchases, but even those actions have their limits.

The EWJ was down $0.09 (-0.75%) to $11.86 per share in premarket trading Wednesday. The index has fallen 1.4% year-to-date, compared with a 5.71% gain for the S&P 500 in the same period.

EWJ-2016-08-03

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