Japanese Prime Minister Shinzo Abe announced an additional stimulus package to support the economy, sending the yen lower and supporting market gains, with currency-hedged Japan exchange traded funds leading the charge.
On Wednesday, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) rose 1.6%, iShares Currency Hedged MSCI Japan ETF (NYSEArca: HEWJ) gained 1.0% and Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) increased 0.9%. The currency-hedged ETFs outperform non-hedged funds when the local currency depreciates against the U.S. dollar.[related_stories]
The yen weakened to ¥105.71 against the U.S. dollar.
Japan revealed a surprisingly large 28 trillion yen or $265 billion, economic stimulus package on Wednesday, surpassing estimates for a 20 trillion yen package, reports Herbert Lash for Reuters.
Abe said the details of the package will be compiled next week.
Related: More Downside for the Yen ETF?