Nikkei 225 Index
The iShares MSCI Japan Index ETF opened 1% down and closed unchanged.
The Nikkei 225 Index closed up almost 3% previous night.
So what happened ???? Why is the Japan ETF so much out of sync compared to the Nikkei 225 Index ?
In this chart, FXY is proxy to the Japanese Yen. We can see that in the one month period, Nikkei 225 Index jumped up by 17.82%, but then Japanese Yen has fallen 7.33%. Since the ETF EWJ is represented in US $ terms, it is able to rise only 8.89%. Its underperforming the Nikkei 225 because the dollar is gaining strength vs the Yen.
Disclosure: I am long DFJ.