WisdomTree Japan Hedged Equity Fund (ARCA: DXJ)

Dernières nouvelles pour WisdomTree Japan Hedged Equity Fund (ARCA:DXJ)

WisdomTree Japan Hedged Equity Fund

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Under normal circumstances, at least 95% of the funds total assets (exclusive of collateral held from securities lending) will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese yen relative to the U.S. dollar. The fund is non-diversified.

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Ahead of next week's <a href="https://www.benzinga.com/topic/bank-of-japan">Bank of Japan</a> (BoJ) meeting, investor sentiment is shifting back toward the &#8216;BoJ trade&#8217; — a strategy that plays on long Japanese equities and banks, while shorting the yen and Japanese government bonds (JGBs).
Despite recent reports suggesting the BoJ is unlikely to hike rates before 2024, this revived trade has gained momentum, particularly after Donald Trump's election win, according to JPMorgan analyst Nikolaos Panigirtzoglou.
The yen has weakened, moving from 150 to 153 against the dollar, and the probability of a December rate hike has dropped sharply from 50% to just over 10%.
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<h2 class="wp-block-heading">Trump's Influence</h2>
Panigirtzoglou highlights that investors have been increasing their long positions in Japanese equities, shorting the yen, and shorting JGB futures, expecting that Japan's inflationary pressure from a weaker yen will lead to a boost in economic activity. 
The "BoJ trade" emerged at the end of 2022, with the expectation that Japan's persistent negative real rates and a weaker yen would spark inflation and allow the BoJ to lift nominal policy rates.
The inflationary aspect of Trump's policies, which reduce the chance of aggressive Fed rate cuts, has reignited investor interest in the trade.
<h2 class="wp-block-heading">The BoJ's Indecision: A Mixed Market Reaction</h2>
Since September, Japanese equities have traded in a range, although Japanese banks have outperformed, benefiting from the weaker yen. 
Positioning in the futures space, particularly for Nikkei and JGBs, has been volatile. While the unwinding of the "BoJ trade" had been significant earlier this year, post-election positioning has surged. However, this build-up in JGB futures didn't last long, as investor sentiment quickly adjusted, reflecting uncertainty over the BoJ's next move.
As Panigirtzoglou notes, the positioning shift was particularly notable, with one-third of the short positions in yen futures and significant unwinding of short positions in JGB futures by the end of September.
<h2 class="wp-block-heading">Is Japan Still The Inflation Play?</h2>
With Japan&#8217;s inflationary prospects, driven by negative real rates and a weaker yen, the "BoJ trade" remains a potential winner for investors willing to bet on Japan's evolving economic landscape. 
But with market fluctuations and global risks, the outlook remains mixed. As Panigirtzoglou states, the trajectory of the trade hinges largely on the BoJ's decisions in the coming months—investors are closely watching to see if the central bank will wait or take action.
The iShares MSCI Japan ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWJ#NYSE">EWJ</a>), the JPMorgan BetaBuilders Japan ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BBJP#NYSE">BBJP</a>) and the WisdomTree Japan Hedged Equity Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DXJ#NYSE">DXJ</a>) are popular ways to get exposure to Japanese equity.
The Invesco Currencyshares Japanese Yen Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXY#NYSE">FXY</a>) provides exposure to the Japanese yen.
Read Next: 
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<li><a href="https://www.benzinga.com/24/11/42244807/dollar-snaps-8-week-winning-streak-falls-to-1-month-low-versus-yen-as-traders-brace-for-bojs-interest-rate-hike">Dollar Snaps 8-Week Winning Streak, Falls To 1-Month Low Versus Yen As Traders Brace For Bank Of Japan Interest Rate Hike</a></li>
</ul>
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Reported Earlier, Japan BSI Large Manufacturing Conditions For Q4 6.3 Vs. 1.8 Est.; 4.5 Prior

Reported Earlier, Japan Gross Domestic Product (GDP) Price Index (YoY) For Q3 2.4% Est.; 2.5% Est.; 3.2% Prior

Reported Earlier, Japan Gross Domestic Product (GDP) Annualized (QoQ) For Q3 1.2% Vs. 0.9% Est.; 2.9% Prior

Reported Earlier, Japan Gross Domestic Product (QoQ) For Q3 0.3% Vs. 0.2% Est.; 0.5% (Revised) Prior

Reported Earlier, Japan Current Account n.s.a. For October 2.457T Vs. 2.318T Est.; 1.717T Prior

Reported Earlier, Japan Adjusted Current Account For October 2.41T Vs. 2.28T Est.; 1.27T Prior

Reported Earlier, Japan Household Spending (MoM) For October 2.9% Vs. 0.4% Est.; -1.3% Prior

Reported Earlier, Japan Household Spending (YoY) For October -1.3% Vs. -2.6% Est.; -1.1% Prior

Reported Earlier, au Jibun Bank Japan Services Purchasing Managers' Index For November 50.5 Vs. 50.2 Est.; 49.7 Prior

Reported Earlier, Japan 10-Year JGB Auction 1.084% Vs. 1.000% Prior

Reported Earlier, Japan Capital Spending (YoY) For Q3 8.1% Vs. 6.7% Est.; 7.4% Prior

Reported Earlier, Japan Industrial Production (MoM) Preliminary For October 3.0% Vs. 3.8% Est.; 1.6% Prior

Reported Earlier, Japan Tokyo Core Consumer Price Index (CPI) YoY For November 2.2% Vs. 2.0% Est.; 1.8% Prior

Bank of Japan Core Consumer Price Index (YoY) 1.5% Vs. 1.8% Est.; 1.7% Prior

Reported Earlier, au Jibun Bank Japan Services Purchasing Managers' Index Preliminary For November 50.2 Vs. 49.7 Prior

Reported Earlier, Japan National Core Consumer Price Index (YoY) For October 2.3% Vs. 2.2% Est.; 2.4% Prior

Reported Earlier, Japan Trade Balance For October -461.2B Vs. -360.4B Est.; -294.1B (Revised) Prior

Reported Earlier, Japan Exports (YoY) For October 3.1% Vs. 2.2% Est.; -1.7% Prior

Reported Earlier, Japan Adjusted Trade Balance -0.36T Vs. -0.15T Est.; -0.27T (Revised) Prior

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