Japanese markets and country-specific exchange traded funds jumped Friday after Prime Minister Shinz Abe called for reforms that could bolster the economy and new inflation data added to speculation on further easing.
The iShares MSCI Japan ETF (NYSEArca: EWJ) rose 2.7% Friday. EWJ is up 1.3% so far this year.
Meanwhile, the CurrencyShares Japanese Yen Trust (NYSEArca: FXY), which tracks Japanese yen movements against the U.S. dollar, dipped 0.7%, with the Japanese yen currency trading at around 120.8 to the U.S. dollar. FXY is down 0.5% year-to-date.
Currency-hedged Japan ETF options were also strengthening off the weaker JPY. On Friday, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) rose 3.1%, iShares Currency Hedged MSCI Japan ETF (NYSEArca: HEWJ) increased 3.9% and Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) gained 3.4%. Year-to-date, DXJ dipped 0.3%, HEWJ was 0.8% higher and DBJP was up 0.7%.
Japanese markets strengthened after Prime Minister Abe announced plans to expand the economy by a fifth but he did not reveal the specifics on how or when that growth will be achieved, reports Chao Deng for the Wall Street Journal.
Abe wants to expand the size of Japan’s economy to ¥600 trillion, or $5 trillion, from ¥490 trillion in the latest fiscal year.
The plan comes as Japan’s economy begins to stumble, which has added to speculation about the success of the so-called Abenomics growth program. For instance, recent Japanese government data revealed that consumer prices fell for the first time in over two years in August, a setback to the administrations fight against deflation.