How to Trade Weak Yen and Japan's Improved Manufacturing Outlook (HIT, HMC, TM, EZJ, EWV, YCL, YCS)

Japanese stocks rose to their highest level since March 11, as a weakening yen and news of manufacturers bringing factories back online made owning Japanese stocks more attractive to investors. The Nikkei 225 index of Japanese stocks rose 249.71 points, or 2.64%, to 9,708.79 during trading in Tokyo on Wednesday. Electronics manufacturer Hitachi, Ltd. HIT saw its shares surge 8.7% higher after it announced that its biggest manufacturing facility should be operating at full capacity in April. Automakers Nissan Motor Co., Honda Motor Company, Ltd. HMC and Toyota Motor Corporation TM ended the trading day higher, fueled by a weaker yen and news that a Nissan engine factory in Iwaki, Fukushima Prefecture that was damaged earlier this month when disaster hit Japan would resume operations by the middle of April. Japanese manufacturers' economic fortunes have suffered since the devastating earthquake and tsunami that hit Japan earlier in the month caused power shortages, lowered oil refining capacity, damaged factories and disrupted supply chains. Manufacturers also faced the burden of a rising yen that would have made their products more expensive. The concern was that a rising inflow of Japanese funds from overseas to finance rebuilding the country's infrastructure and speculators betting on this inflow would send the yen higher. The G-7 group of industrialized nations stepped in and announced that they would work together to prevent the yen from appreciating to levels that would hinder Japan's economic recovery. Japan's stock market has also been under heavy selling pressure as the ongoing situation at the Fukushima Daiichi nuclear power plant continues to look grim. Radioactivity contaminated the soil and sea near the plant, the Tokyo water supply and trace amounts of radiation are being detected in Asia and North America. Although the outlook for Japanese exporters is looking better, authorities need to find a way to cool the reactors at the troubled nuclear power plant and prevent the further spread of radiation before the outlook for the Japanese economy can get much better. If Japan's manufacturers continue to report good news, the G-7 keeps the yen from climbing too high and the Fukushima Daiichi nuclear power plant is brought under control, the ProShares Ultra MSCI Japan EZJ ETF should see its share price rise. If the good news from the manufacturers is overshadowed by more problems at the Fukushima Daiichi nuclear power plant, then the ProShares UltraShort MSCI Japan EWV may climb higher. The ProShares Ultra Yen YCL and the ProShares UltraShort Yen YCS are two ETFs for investors to consider, depending on which direction they think the yen is headed.