A historic Trans-Pacific Partnership pact will lower trade barriers around the Pacific, bolstering export-heavy Japanese markets and country-specific exchange traded funds Monday.
The iShares MSCI Japan ETF (NYSEArca: EWJ) was 2.7% higher Monday. EWJ gained 4.2% year-to-date.
Meanwhile, the CurrencyShares Japanese Yen Trust (NYSEArca: FXY) dipped 0.3%, with the Japanese yen currency trading at around 120.5 to the U.S. dollar.
Currency-hedged Japan ETF options were also strengthening off the weaker JPY. On Monday, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) rose 3.1%, iShares Currency Hedged MSCI Japan ETF (NYSEArca: HEWJ) increased 2.9% and Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) gained 2.8%. Year-to-date, DXJ was up 1.6%, HEWJ advanced 3.7% and DBJP added 3.7%.
Japanese equities were strengthening after the U.S., Japan and 10 countries around the Pacific ring signed an accord Monday to lower trade barriers for goods and services, reports William Mauldin for the Wall Street Journal.
The Trans-Pacific Partnership helped cement Japan’s role as a major ally and trading partner with the U.S. and as a counterweight to China, reports Jacob M. Schlesinger for the Wall Street Journal.
“The greatest absolute gains” from TPP “are estimated for Japan,” according to a 2012 analysis from the Peterson Institute for International Economics, which examined the implications for the then-nascent bloc – Japan joined negotiations with the other members after newly elected Prime Minister Shinzo Abe pledged to join negotiations in 2013.