Japan: Weekly ETF and CEF Performance

Japanese ETFs trading in the U.S. posted mixed results last week with no fund moving up/down by more than 1%.

The Nikkei 225 is poised to test a multi-year high set in late February, but continued yen weakness will limit upside for investors in the U.S.

In early Monday trading in Tokyo, the Nikkei was last up 1% at 18,150+. It is less than 0.4% below its calendar year, 52-week and multi-year high close of 18,215 set on Feb. 26 (intra-day it traded as high as 18,300).

See the chart below of the N225 as of Friday's (6/15) close.

The 10 Japanese ETFs (including 2 CEFs) trading in the U.S. were flat (combined average) last week, and remain positive on the year, up 1.0%.

Here's their combined average return over the past two months:

06/01 - 06/08: -0.6%
05/25 - 06/01: +2.9%
05/18 - 05/25: +0.3%
05/11 - 05/18: -3.4%
05/04 - 05/11: +0.4%
04/27 - 05/04: +0.8%
04/20 - 04/27: -1.7%
04/13 - 04/20: +0.6%

See the chart below for more details of last week's and ytd returns.

Click to enlarge chart

Disclosure: The author does not own shares of any funds mentioned in this article.

The Japan Equity Fund (JEQ), one of two closed-end Japan funds, led all advancers, +0.9%, and is now up 2.7% year-to-date. The Japan Smaller Cap Fund (JOF) [closed-end] gained 0.3%, lowering its ytd loss to 9.9%.

Vanguard's Pacific Stock ETF (VPL) was flat, but continues to lead all Japan ETFs ytd (+6.7%).

iShares MSCI Japan Index (EWJ), the most actively traded country-based ETF, lost 0.1%, but is up 3.0% for the year.

As reported in recent weeks, yen weakness persists against both the euro (all-time low) and US$ (~ 4.5 year low). I still don't see any signs the yen carry trade will unwind, even with a BoJ rate hike as early as August, as some are still forecasting, following the BoJ's latest decision to pause at 0.5%.

See the chart below of the CurrencyShares Japanese Yen Trust (FXY) ETF, which was launched earlier this year.

For your reference, here's a list of the 10 funds surveyed in this weekly summary.

iShares MSCI Japan Index (EWJ)
iShares S&P/TOPIX 150 (ITF)
Japan Equity Fund, Inc. (JEQ)
Japan Smaller Capitalization Fund, Inc. (JOF)
SPDR Russell/Nomura Prime Japan (JPP)
SPDR Russell/Nomura SmallCap Japan (JSC)
Vanguard Pacific Stock (VPL)
WisdomTree JP High-Yielding Equity (DNL)
WisdomTree JP SmallCap Dividend (DFJ)
WisdomTree JP Total Dividend (DXJ)