ETF Trends
ETF Trends

The yen is climbing to all-time highs against the dollar, prompting speculation Japan’s central bank will be forced to step in to cool the currency’s rise, which is hurting exporters.

The Japanese government is getting ready to take measures and intervene in currency markets, according to reports.

The dollar has been steadily giving up ground to the yen and Swiss franc as U.S. politicians wrangle over the debt ceiling. A Senate vote on the compromise was expected Tuesday.

Yet the dollar hasn’t weakened against every currency. [ETF Trends Guide to Currency ETFs.]

“Although the troubles are coming out of the U.S., risk aversion has overtaken the market and for this reason … currencies such as the euro, British pound and Australian and Canadian dollars have also sold off,” said Kathy Lien, of GFT, on MarketWatch. [Swiss Franc, Yen ETFs Rally on Safe-Haven Status.]

Meanwhile, the Bank of Japan is considering a monetary easing plan to weaken the yen, a step that has been on the minds’ of Japanese officials since the yen began its ascent. Chris Sanders for Reuters reports that the Bank of Japan will consider more monetary easing measures at a scheduled two-day meeting. An additional $65 billion may be added to a $40 trillion yen-asset-buying fund at the meeting.

Exchange traded products that follow the yen include CurrencyShares Japanese Yen Trust (NYSEArca: FXY) and iPath JPY/USD Exchange Rate ETN (NYSEArca: JYN). [Taking a Bold Move With Japan ETFs.]

The yen’s surge is threatening profits at Japanese exporters and threatens to wipe out the economic recovery from the earthquake and tsunami, Bloomberg reported Tuesday.

CurrencyShares Japanese Yen Trust

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Tisha Guerrero contributed to this article.

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.