So Wisdom Tree has a crap-load of etf’s, I mean who doesn’t these days? Their biggest money maker is the $DXJ which is supposed to get you long Japan stocks and short Yen.
Right now the opposite is pretty much happening and has been for a while. It seems that Wisdom Tree lives and dies with the action in $DXJ as you can see in the charts below.
“Investors in this product will want to see the yen be devalued by the local government, or simply a weakening yen overall, as it plays into DXJ’s hedge while simultaneously helping lift many of its equity holdings.”
“Japan is an export-heavy economy, and when the yen sinks, the stock market tends to move higher. In that regard, a sinking yen plays into the favor of DXJ, as its hedging will profit from volatility in theUSD/JPY ratio as well as its equity holdings gaining.”
$DXJ
$WETF
$FXY
Nikkei
Yesterday, Japan’s “40” year bond tagged a 0.1% yield.
I’m sure it’s fine.
Premium subscriptions available here.
