DXJ Wins on Bank of Japan Action

DXJ Wins on Bank of Japan Action 

A Seeking Alpha Contribution

Summary

  • DXJ owns Japanese stocks, but hedges away the currency risk, leaving investors with the nominal rise in stock prices.
  • DXJ was attractive due to Japanese QE; more QE makes DXJ more attractive.
  • Japanese policy choices have increased the risk of a rapid yen devaluation, which would be favorable for DXJ.

Back in September, I wrote Japan Hedged ETFs Ready To Shine Again. At that time, yen hedged Japanese equity ETFs looked attractive because the pension funds in Japan were about to begin selling bonds and buying stocks. What was not expected was the Bank of Japan decision to nuke the Japanese yen in order to spur inflation. The case for currency-hedged Japan ETFs has only grown stronger as Japanese policy grows more extreme…..To Continue Reading, Please Click Here.

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