Although Australia has an AAA credit rating, volatility in the Australian dollar has been rising ahead of next month’s national elections. Lack of clarity on the time line for Federal Reserve tapering could pressure the greenback. Any retrenchment in oil prices would weigh on the Canadian dollar. Those scenarios also highlight the yen’s safe-haven allure.
Japanese equity bulls are left to hope that the yen’s status as a shelter from the storm play is short-lived because in the past month, iShares MSCI Japan ETF (NYSEArca: EWJ) and the WisdomTree Japan Hedge Equity Fund (NYSEArca: DXJ), two of this year’s most prolific asset-gathering ETFs, are each down about 1.7%.
CurrencyShares Japanese Yen Trust
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DXJ.