Japan-related exchange traded funds surged Thursday, climbing over their short-term trends, as the U.S. dollar appreciates against the yen currency and Japanese banks generate robust profits.
Hedged Japanese-equity ETFs that diminish the effects of a depreciating yen led fund moves Thursday, with the db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP) rising 4.7%, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) gaining 4.3% and the WisdomTree Japan Hedged SmallCap Equity Fund (NYSEArca: DXJS) adding 3.6%. The unhedged iShares MSCI Japan ETF (NYSEArca: EWJ) rose 2.9%. Additionally, the Japan ETFs crossed over their 50-day simple moving averages.
The U.S. dollar strengthened 1.8% against the Japanese yen Thursday, trading at about 99.5 yen. The CurrencyShares Japanese Yen Trust (NYSEArca: FXY) gained 1.7% in late day trading. [Bearish Yen Forecasts Could Prove Bullish for DXJ]
The Nikkei 225 Index was 2.5% higher Thursday following reports that China’s manufacturing Purchasing Managers’ Index rose 0.2% in July. [Is Japanese Political Stability Good For Asian ETFs?]
Last week, the Cabinet Office announced that Japan, the world’s third-largest economy, showed signs of self-sustaining recovery, Bloomberg reports.
“The environment is improving for Japanese companies to expand capital spending,” Takeshi Kunibe, chairman of the Japanese Bankers Association, said in the article.