Yen Weakness Continues to Haunt South Korea-Listed ETFs

The yen's weakness persisted despite joint foreign-exchange intervention by U.S. and Japanese monetary authorities, causing losses for South Korea-listed Japan Currency ETFs.

Persistent yen weakness has left its mark on yen-related exchange-traded funds listed in South Korea, with TIGER Japanese Yen Futures posting a one-month return of -3.00% as of August 14th and a year-to-date return of -3.51%, according to Koscom ETF Check.

Funds with yen exposure lagged behind even when they tracked the same index, with RISE US S&P 500 Yen Exposure (Synthetic H) returning 6.48% year-to-date compared to 11.85% for RISE US S&P 500.

Park Sang-hyun, an analyst at iM Securities, said further intervention by the U.S. and Japan is highly possible given their determination to stem yen weakness, but added that the main reason some investors doubt the authorities can successfully defend the yen is Japan's fiscal risk tied to Prime Minister Takaichi's expansionary fiscal policy.