Currencies

Highlighting the PowerShares CurrencyShares Japanese Yen Trust

This week’s fund, the PowerShares CurrencyShares Japanese Yen Trust (FXY), tracks the changes in value of the Japanese yen, which is the national currency of Japan.

FXY is a favorite among investors for both long-and short-term exposure to the yen. Its strategy is simple – it holds Japanese yen, which is the national currency of Japan, in a deposit account with JPMorgan.

Japan’s central bank, the Bank of Japan (BOJ), currently is using a quantitative easing policy to spur economic growth in the country. At its March meeting, BOJ confirmed its stance on keeping interest rates near 0% by removing a target date for achieving its 2% inflation goal.

Leaving policy unchanged shows BOJ’s willingness to stick with its aggressive easing program, which contrasts with the Fed continuing to hike rates. Lower interest rates spur increased spending in the economy.

The Japanese Yen/USD exchange rate, like foreign exchange rates in general, can be volatile and difficult to predict. Investors should do their share of due diligence before investing in the fund.

The fund, launched in February 2007, has a 30-day average daily trading volume of 222,787 shares. In addition, FXY has a market value of roughly $170.2 million and an expense ratio of 0.40%.

Year to date, FXY has returned 5.92%. FXY recently pulled back from its 52-week high of $91.62 to give investors a potentially attractive entry point at the current time.

For investors who believe in the strength of the Japanese yen, I encourage you to look into the PowerShares CurrencyShares Japanese Yen Trust (FXY).

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.