When it comes to talk of currencies these days, plenty of attention, and rightfully so, is being heaped upon the U.S. dollar and the euro.
The PowerShares DB US Dollar Index Bullish Fund (NYSEArca: UUP) is up nearly 4% just this quarter while the euro and euro hedged ETFs took center stage Thursday after the European Central Bank unexpectedly lowered interest rates.
The Eurozone’s benchmark borrowing rate has been pared to 0.05% from 0.15% while its marginal lending facility has been lowered to 0.3% from 0.4%. The ECB’s deposit facility is now deeper in negative territory at -0.2% from -0.1%. [Hedged Europe ETF Shines]
Almost unnoticed amid all the dollar buying an euro selling has been a precipitous decline in the Japanese yen and some recently sturdy performances for the likes of the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) and the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP).
DXJ and DBJP are up an average of 1.7% over the past month and while that may not sound like much, more near-term gains could be on the way. The new low made by the CurrencyShares Japanese Yen Trust (NYSEArca: FXY) on Thursday was not just of the 52-week variety. It was of the almost six-year variety. That was followed by the yen making a new six-year low against the dollar during Friday’s Asian session. [Keep Tabs on These Currency ETFs]
The tumbling yen is also lifting less heralded Japan ETFs. For example, the WisdomTree Japan Hedged Tech Media & Telecom Fund (NYSEArca: DXJT) is up 2.6% in the past month. While an isolated sector play with the yen hedge kicker, DXJT has another trick up its sleeve. The ETF’s largest holding with a weight of 8.5% is Softbank, which just happens to own about a third of Alibaba. [An ETF With a Backdoor to Alibaba]