The larger decline for the Topix is weighing on the iShares S&P/TOPIX 150 Index Fund (NYSE: ITF). ITF, which has $110 million in assets, has been a stealthier play on resurgent Japanese stocks this year. ITF is down 9% early Thursday. However, the ETF tracks the S&P/TOPIX 150 Index, potentially making it vulnerable to selling pressure today that could erode its over 19% 2013 gain. [Taking A Bold Move With Japan ETFs]
Japanese bond ETFs are also in play after the Bank of Japan had to roll-out a $19 billion fund-supplying operation after Japanese government bond yields hit their highest levels in nearly a year.
The BOJ’s financial operations division said in a statement the operation to provide fixed-rate short-term loans to financial institutions was to respond to “the unreasonable increase in the volatility of long-term rate,” reported Eleanor Warnock for MarketWatch.
Lower bond yields have been viewed as pivotal to BoJ’s recently announced monetary stimulus program, but yields have instead steadily risen. In just the past month, the Powershares DB 3x Inverse Japanese Government Bond ETN(NYSE: JGBD) is up almost 7%. JGBD tracks an index that is intended to measure the performance of a notional short position in 10-year JGB Futures. The ETN is down 2.4% on volume that has already eclipsed the daily average.
ETF Trends editorial team contributed to this story.