iShares Currency Hedged MSCI Japan ETF

HEWJ

Market cap $658M

iShares Currency Hedged MSCI Japan ETF (HEWJ) offers exposure to Japanese equities with full JPY/USD currency risk hedging. HEWJ is recommended as a hold due to Japan's monetary policy normalization, emerging nominal growth, and effective currency risk mitigation. The ETF provides a 30-day SEC yield of 4.40%, a P/E of 19.67, and a 0.49% expense ratio.

Core inflation, which strips out prices of fresh food, remained unchanged from 3% in October, and came in line with Reuters-polled economists' average estimate.

Nikkei 225 struggles below 50,000 as upside momentum fades. Daily RSI drifts into neutral territory, signaling consolidation.

The Nikkei 225 falls to 49,303 as rate-hike odds for December 19 approach 80%. Electronics, pharma, and industrials lead declines as liquidity expectations tighten.

Nikkei closes at 51,063, extending gains for a second session. Manufacturing confidence hits a four-year high as exports strengthen.

Japan stocks are rallying on the BoJ's dovish stance & Takaichi's pro-growth push. Play the trend via ETFs DXJ, DBJP, HEWJ, and YCS.

Solid growth and ongoing shareholder-friendly reforms are driving Japanese equity gains, keeping us overweight. We see the AI theme playing out globally.

As the global private equity industry took tentative steps toward recovery in 2024, Japan raced ahead. The value of private equity investment in Japan jumped nearly 41% over the prior-year total in 2024, far outpacing the 25% year-over-year gain in global private equity deal value, according to S&P Global Market Intelligence data.

Today's data were a mixed bag, but the Bank of Japan will pay more attention to the sharp rise in Tokyo's inflation. Tokyo consumer prices rose more than expected to 2.6% YoY (vs 2.2% in July, 2.3% market consensus).

The Nikkei suffered its worst ever one-day slump this morning. There are plenty of technical efforts, and it might have been a perfect storm of slightly negative data that agglomerated together into poor sentiment, but Sahm's Rule looms. We think the primary driver of the declines in Japan, at least to the extent that they can be justified, comes down to the higher unemployment in the US.