Additionally, more easing may help smaller Japanese companies outperform their larger counterparts. Investors seeking small-cap exposure can turn to the WisdomTree Japan Hedged Small Cap Fund (NasdaqGM: DXJS), which also tries to diminish currency risk. DXJS was up 1.4% Monday.
However, ruling Liberal Democratic Party lawmaker Kozo Yamamoto has warned that the Bank of Japan may not offer further easing this year in light of uncertainty surrounding the U.S. Federal Reserve’s rate hike decision, reports Yuya Shino for Reuters. [Central Banks Complicate Capturing Japan ETF Returns]
“If the U.S. Federal Reserve raises interest rates this year, that could accelerate yen declines. That would hurt households” by pushing up imported food costs, Yamamoto told Reuters. “The BOJ will probably stand pat for the rest of this year” to scrutinize how a rate hike could affect yen moves.
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Max Chen contributed to this article.