Japanese equities are moving into bear market territory but investors aren’t done with Japan exchange traded funds yet.
The Nikkei 225 Index fell 6.4% on Thursday, a 24% drop from previous highs. When an index falls 20% or more from its high, it is considered “bear market territory,” Sarah DiLorenzo for Associated Press reports. [Japanese Yen ETFs and the Carry Trade]
Retail investors and financial advisors, though, are still interested in Japanese equity ETFs, while some are even buying up more shares in DXJ or EWJ. According to Index Universe data, EWJ has already added $5.4 billion, while DXJ has gathered $7.5 billion in 2013. Traders are saying that any selling in Japanese shares are met with willing buyers.
“You’ve had a massive regime change in Japan,” David Kotok, chief investment officer at Sarasota, Cumberland Advisors, said. “We can afford to be patient.”
Kotok holds the WisdomTree fund and said he is adding to those positions as shares dipped. [Yen-Hedged Japan ETFs Soar as Nikkei Tops 15,000]
On Friday, the Nikkei jumped 1.9% after its largest decline in three weeks.
“Psychologically the market feels like we’re nearly done with the correction,” Juichi Wako, a strategist at Nomura, said in a Bloomberg article. “It’s a good sign the rise in long-term interest rates didn’t harm the U.S. economy. It’s leading to a sense of security in the market.”