ETF Trends
ETF Trends

On Monday, the yen hit an 18-month high against the dollar, sending the Japanese currency exchange traded fund (ETF) up. Traders retreated from "risky" assets amid severe nervousness over the condition of the financial sector. Peter Garnham for Financial Times reports that sliding Asian equity markets is one reason investors are unwinding the yen carry trade. The carry trade is where lower-yielding currencies are sold to fund the purchase of riskier, higher-yielding assets elsewhere. Japan’s chief cabinet secretary, Nobutaka Machimura announced that Japan would not intervene in currency markets, sending the yen into an accelerated rally.

The yen rose to a high of 109.13 before settling to 109.50, up 1.1%. The CurrencyShares Japanese Yen Trust (FXY) launched in February.  It is up 10.4% since inception.

Yen_etf

For full disclosure, Tom Lydon is a member of the board of Rydex Investments.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.