Japanese equities have strengthened in the past week as the yen currency weakened. The export-heavy market has been weighed down by an appreciating JPY that recently climbed near an 18-month high.

However, reports of a deteriorating economy, disappointing stimulus measures and a strengthening JPY currency have all dragged on the Japanese equity markets. Year-to-date, EWJ dropped 6.5% and DXJ, which hedged against a weakening yen, declined 17.4%.

Consequently, more money managers are growing pessimistic over Japan’s outlook. For instance, BlackRock is among firms ending their bullish call on Japan – the money manager also downgraded its outlook on Japan from overweight to neutral, citing the stronger yen’s risk to export industry’s earnings and increased volatility.

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WisdomTree Japan Hedged Equity Fund

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