The Japanese stock market took a hit amid concerns related to escalating trade tensions between the US, China and Mexico, and an overall slowdown in the global economy. Japan is the worst performer amid major emerging and developed countries, recording a six-month return of around -5%, denominated in USD as of last Thursday. Japan was also among the riskiest countries, with its volatility of almost 16% only slightly behind that of China’s, as measured by Axioma’s Worldwide short-horizon fundamental model.
However, when looking at risk from a local currency prospective, Japan’s short-horizon risk of 14.3% was 10 percentage points lower than that of China’s, as revealed by Axioma’s Japan and China short-horizon fundamental models, respectively.
See graph from the Equity Risk Monitors as of 6 June 2019: