ETF Trends
ETF Trends

A strong Japanese yen is a boon and a burden. It might be more of the latter now as the yen and its exchange traded fund (ETF) grow stronger, threatening to put a crimp in Japan’s recovery efforts.

The Japanese yen is gaining strength, which is putting exporters on guard because of the threat it poses. Strategist Fumiyuki Nakanishi said the dollar-yen rate and the performance of exporters would likely determine the Nikkei’s direction this week, with the ultimate goal of keeping the ratio above 1,000.

Many analysts and insiders say it is not “right” to deliberately weaken the yen through market intervention, report Colin Ng and V. Phani Kumar for The Wall Street Journal. The dollar-yen rate and the performance of exporters would likely determine the Nikkei’s direction this week.

In response, Japanese government bonds were higher as Tokyo shares dropped steeply. The stronger yen may hurt exporters, but ETF investors can capitalize in a few ways:

  • CurrencyShares Japanese Yen (NYSEArca: FXY): down 0.42% year-to-date

  • WisdomTree Dreyfus Japanese Yen (NYSEArca: JYF): up 0.6% year-to-date

For more stories about Japanese yen, visit our Japanese yen category.

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

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.