With the SPDR S&P 500 (NYSEArca: SPY) accounting for the bulk of outflows from U.S. ETFs last month, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) moved back into the top spot among this year’s top asset-gathering ETFs. DXJ’s primary rival, the slightly large iShares MSCI Japan ETF (NYSEArca: EWJ) is in second place.

With $10.55 billion in assets under management, DXJ could make a run at EWJ for crown as largest Japan ETF. The iShares offering had $11.24 billion in AUM as of Wednesday. Both ETFs have been essentially flat this week following news released last weekend that Japan will host the 2020 Summer Olympics.

DXJ allocates nearly half of its combined weight to the industrial, technology and materials sectors, groups that should benefit from increased infrastructure spending. EWJ, which is not currency-hedged, devotes over 35% of its weight to those sectors. Those lineups imply both funds should benefit from increased infrastructure spending in Japan. [An Olympic Jolt for Japan ETFs]

What could make DXJ an alluring near-term play is that ETF appears to be breaking out of a consolidation pattern and that breakout could the set stage for DXJ to return to its previous highs. DXJ tumbled from the mid-$50s to the low $40s starting in May and into June as markets started questioning the efficacy of Abenomics. That questioning sent the yen surging and DXJ tumbling. [Central Bank Bonanza Could Impact Japan, U.K. ETFs]

“Measured move-wise, we want to look at the size of the base. The 12 points from 54 down to 42 represents the base of the consolidation. So we’d take that 12 points and add it to the 46.50ish breakout. This gives us a target somewhere around 58-59 and new 52-week highs in DXJ,” said J.C. Parets of All-Star Charts. “If I we’re long at that point, I’d be taking profits at the May highs. That’s enough for me before waiting for a new setup and risk/reward scenario. But the measured move makes sense; that target takes us back to the 2007 all-time highs. So it would not be that surprising if we get all the way back up there.”

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