DXJ is “suitable as a satellite holding for those who want to invest in Japanese equities but don’t want exposure to changes in the rate between the Japanese yen and the U.S. dollar,” Morningstar analyst Patricia Oey writes in a report on the ETF. “This fund is an attractive option during periods when the yen is falling against the dollar … with its hedged strategy, this exchange-traded fund’s returns will not be negatively impacted by the falling yen, unlike unhedged peers such as iShares MSCI Japan (EWJ).”
Of course, Monday’s sell-off illustrates that currency hedging is a two-way street.
WisdomTree Japan Hedged Equity Fund
CurrencyShares Japanese Yen Trust
