BOJ Speculation Revives Currency-Hedged Japan ETF Trade

In an environment of falling interest rates and rising commodity prices, reflation-related sectors, like banks, insurance and real estate companies could benefit the most.

Currency hedged financial sector-related ETFs led gains Friday. The WisdomTree Japan Hedged Financials Fund (NYSEArca: DXJF), which tracks the Japanese financial sector and hedges against a depreciating yen currency,increased 5.0% and the Japan Hedged Real Estate Fund (NYSEArca: DXJR), which tracks a group of diversified real estate, real estate investment trusts and some construction companies, advanced 3.0%.

Looking ahead, Japanese market observers will be watching for next week’s BOJ monetary policy meeting.

Currency-hedged ETFs may continue to outperform non-hedged options as the yen currency depreciates. Bullish bets on the JPY have reached a record, leaving speculators vulnerable to any additional stimulus the Bank of Japan announces in its April 27, 28 policy meeting, reports Netty Idayu Ismail for Bloomberg.


WisdomTree Japan Hedged Equity Fund