Japan Hedged ETFs Ready To Shine Again
A Seeking Alpha Contribution
Summary
- The Japanese yen has fallen to a new 52-week low.
- Pension funds are being urged to sell bonds and buy stocks.
- The Bank of Japan is the largest holder and largest buyer of JGBs.
- Conditions are ripe for another rally in currency hedged Japan ETFs.
With the Japanese yen falling to a new 52-week low, the next leg down for the heavily printed currency is under way.
The Case For a Weak Yen
In 1989, the Nikkei peaked above 40,000. It then entered a secular bear market and fell to nearly 7000 in 2009. It has currently broken out to over 10,000. Longer term, the yen has been advancing on the U.S. dollar for decades, rising to nearly 75 yen per dollar in 2011. During this period, the Japanese economy has been growing in real terms, but in nominal terms, it has been flat. Japan is currently at GDP levels seen in the mid-1990s, but adjusted for a smaller population and a stronger yen, the standard of living for average Japanese citizens has continued to improve….To continue reading, please Click Here…
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