Japan ETFs Rocket as Nikkei Tops 14,000

May 7th at 8:12am by John Spence

Japanese ETFs were in focus again Tuesday as the benchmark Nikkei 225 rose above the 14,000 mark for the first time since the financial crisis.

“Japanese stocks soared Tuesday, towering over other Asian markets as Tokyo investors returning from a four-day weekend played catch-up with central-bank decisions, strong U.S. jobs data and a weaker yen,” MarketWatch reports. The Nikkei rose more than 3%.

WisdomTree Japan Hedged Equity (NYSEArca: DXJ) and iShares MSCI Japan (NYSEArca: EWJ) are the two best-selling ETFs in 2013, raking in nearly $10 billion combined. [Japan ETFs Open the Floodgates as Yen Tanks]

DXJ has a performance edge this year because the specialized ETF hedges its currency exposure to the Japanese yen, which has weakened versus the dollar amid the Bank of Japan’s unprecedented efforts to stoke inflation and boost the country’s exporters.

The WisdomTree ETF has posted a total return of 31.3% year to date, compared with a gain of 20.3% for EWJ, the iShares fund.

CurrencyShares Japanese Yen Trust (NYSEArca: FXY), an ETF tracking the movement of the yen against the dollar, is down about 13% so far this year.

“Despite numerous attempts, the dollar has failed to breach the 100 yen mark but most currency watchers think it’s only a matter of time,” the Associated Press reports.

iShares MSCI Japan

japan-etf-ewj

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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