From WisdomTree: The Bank of Japan (BOJ) de-facto eased policy at this week’s board meeting. They introduced “forward guidance” on top of their long-standing policy of QQE–quantitative and qualitative easing.
In short: the board now spelled out its commitment to allowing a desynchronization between rising U.S. rates and Japanese rates staying anchored around zero. They even committed to a timeline: rates will stay anchored around zero at the very least until the effects of the consumption tax hike in October next year have fully played out. This suggests early 2020 as the earliest target date for any actual rate hikes in Japan.
The official text of the board meeting says it all. It is entitled “Strengthening the Framework for Continuous Powerful Monetary Easing,” and it reads, “The bank intends to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including effects of the consumption tax hike scheduled to take place in October 2019.”
The WisdomTree Japan Hedged Equity Fund (DXJ) was unchanged in premarket trading Wednesday. Year-to-date, DXJ has declined -6.39%, versus a 7.44% rise in the benchmark S&P 500 index during the same period.
DXJ currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #15 of 77 ETFs in the Asia Pacific Equities Ex-China ETFs category.
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