Sun Continues To Set On Japan

Japanese man

Good grief. Investors in Japan and the Japanese economy itself can’t seem to catch a break. Sluggish growth in the U.S., expectations for slower growth in China, the European debt crisis and a rising Yen spell trouble for the Nikkei 225 and the Topix.

Now Japanese stocks are trading lower on Monday on the back of a Goldman Sachs report that ratchets down growth estimates for both Japan and the U.S.

Long story short: This isn’t the time to be involved in Japanese stocks. For those willing to make a bearish bet on Japanese equities, the UltraShort MSCI Japan ProShares (EWV) could be worth a look.

Considering the popularity of inverse ETFs and that Japan is a major market, EWV has extremely low volume (about 9,800 shares per day on average). Still, EWV has an average trading range of $1.06, making it nothing if not trade-worthy.

The bearish outlook for Japan makes EWV worth a look here and the ETF will be particularly compelling if resistance at $48 is broken.

If a light volume inverse ETF isn’t your cup of tea, the Professor recommends the CurrencyShares Japanese Yen Trust (FXY) to play a stronger Yen with. FXY has recently broken out and Japan can’t seem to get a handle on its currency problem.

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