Japan ETFs Experience Record Inflows in Just a Week

by: Tom Lydon

While news of Japan’s disasters was hardly cheerful, investor interest in the island nation skyrocketed in just as short a time frame, as more than a billion found its way into Japan-related exchange traded funds.

In the following week after the disaster hit Japan, on March 11, Japan-related ETFs experienced $1.2 billion in inflows, writes Hung Tran for Mutual Fund Wire. On March 16 alone, Japan equity ETFs saw an estimated $700 million in inflows, the heaviest one-day inflow on record.

Despite high interest in Japan ETFs, Mike Khouw, Cantor Fitzgerald’s director of U.S. Equity Derivatives Trading, remarks that “the activity we’re seeing is call selling and put buying, and both are fairly negative” and that “the unusually heavy volume suggests there is some overhang in the Japanese market,” reports Michelle Rama for CNBC.

In the wake of recent disasters, preliminary estimates put damage over $100-200 billion, with most of the damage in infrastructure, such as roads, ports, railroads and nuclear power plants. The investment opportunity is knocking and once the rebuilding effort gets underway, it will put more people to work and money back into the economy.

Industrial, financial and consumer discretionary sectors should all be positively affected by the re-build in infrastructure and uptick in workers. Japan is a country that has come back before, and the government is dedicated to rebuild what was lost.

Japan country-specific ETFs, include:

  • iShares MSCI Japan Small Cap Index (NYSEARCA:SCJ)
  • iShares MSCI Japan (NYSEARCA:EWJ)
  • SPDR Russell/Nomura PRIME Japan (NYSEARCA:JPP)
  • SPDR Russell/Nomura Small Cap Japan (NYSEARCA:JSC)
  • WisdomTree Japan Dividend Fund (NYSEARCA:DXJ)
  • WisdomTree Japan SmallCap Dividend Fund (NYSEARCA:DFJ)
  • iShares S&P/TOPIX 150 (ITF)

Inverse and leveraged Japan ETFs:

  • ProShares Ultra MSCI Japan (NYSEARCA:EZJ)
  • ProShares UltraShort MSCI Japan (NYSEARCA:EWV)

Japanese Yen ETFs:

  • CurrencyShares Japanese Yen (NYSEARCA:FXY)
  • WisdomTree Dreyfus Japan Yen (NYSE:JYF)
  • iPath JPY/USD Exchange Rate ETN (NYSEARCA:JYN)
  • ProShares Ultra Yen (NYSEARCA:YCL)
  • ProShares UltraShort Yen (NYSEARCA:YCS)

Read the disclaimer as Tom Lydon is a board member of Rydex Funds.

Max Chen contributed to this article.

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