What the Japanese Yen ETFs Can Indicate to Investors
July 10th at 2:00pm by Tom Lydon
Concerns about the global economy are weighing down the U.S. dollar, as it fell to its lowest levels against the Japanese yen in more than five months, impacting yen-related exchange traded funds (ETFs).
The Japanese yen has been on an upswing in recent weeks as investors search for the safest assets. Deborah Levine for MarketWatch reports that the overall sentiment over the global economy, mixed with down Japanese data has been causing the yen to rally.
The Macro Trader on Seeking Alpha reports that although inflation will not be here tomorrow, governments have printed lots of currency. Until that money is circulating, the super inflation many anticipate will not kick in. Rather than seek the Japanese yen for its usual carry-trade appeal, many are turning to the yen as a safe haven from inflation.
Macro Trader notes that each time investors have fled risky assets such as stocks and corporate debt, they have flocked to the yen (among other things) as an alternative. The currency and fixed income markets are good indicators of high and low risk and could be a part of your strategy and trend following plan in tumultuous times.
- CurrencyShares Japanese Yen Trust (FXY): up 7.2% over three months
- WisdomTree Dreyfus Japanese Yen (JYF): up 7.2% over three months
For full disclosure, Tom Lydon’s clients own shares of FXY.
For more stories about the Japanese yen, visit our Japanese yen category. For more information about currency trading, visit our currency special report.
