Meanwhile, currency hedged ETFs, which diminished the negative effect of a weaker yen currency, also bounced higher. For instance, on Monday, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) rose 2.0%, iShares Currency Hedged MSCI Japan ETF (NYSEArca: HEWJ) increased 2.4% and Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) gained 2.2%.
The sharp rebound in U.S.-listed Japan ETFs suggests that investors believe the recent selling may have been over done. Over the past week, EWJ dropped 6.5%, DXJ declined 11.2%, HEWJ decreased 11.4% and DBJP retreated 11.0%.
The ongoing yen strength could continue to weigh on Japanese equities. For instance, electronic parts maker Murata Manufacturing Co. lost 13% following its projects for a dip in earnings in the fiscal year, citing a stronger currency, lower product selling prices, increased fixed costs and higher R&D expenses.
Click here to read more ETF news, strategy and commentary on ETF Trends.
iShares MSCI Japan ETF