Short Yen ETF Soars as USD/JPY Tops 100

After several weeks of trying and failing, currency traders were finally able to push the U.S. dollar past the psychologically significant 100 level against the the Japanese yen Thursday.

USD/JPY, one of the world's most heavily traded currency pairs, is currently trading higher by 1.49 percent at 100.47 while being bid at 100.46 and offered at 100.49, according to Investing.com.

Predictably, the move by USD/JPY above the 100 area has boosted the ProShares UltraShort Yen YCS, which is designed to deliver twice the daily inverse of the yen against the dollar. Said another way, if USD/JPY rises one percent, YCS should gain two percent.

YCS is doing its job today as the ETF is up 3.34 percent and earlier touched a new 52-week high at 66.74 after USD/JPY traversed 100 for the first time in four years. Volume in YCS is about 19 percent above the daily average.

Some traders have previously speculated that the gains for the dollar against the yen will keep coming above 100 because of the large amount of stop-loss orders placed at and around that area by forex and options traders that took the wrong side of the trade.

Helped by Japanese Prime Minister Shinzo Abe's desire to weaken the yen and the Bank of Japan taking a page from the Federal Reserve's quantitative easing playbook, the Japanese currency is the worst-performing developed market currency in the world this year.

Since mid-November 2012 when it became evident that Abe could win Japan's top elected position, YCS surged 51 percent and that does not include Thursday's surge.

YCS had $466.17 million in assets under management, a massive amount by the standards of leveraged ETFs, as of March 31, according to ProShares data.

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