Additionally, Japanese stocks are trading at a cheap 13 times earnings, compared to about 18 for U.S. stocks.
“There’s a possibility of a big rally, and it’s not a bet you have to pay up for,” Loeb added.
Currency traders taken short positions in the CurrencyShares Japanese Yen Trust (NYSEArca: FXY) to capitalize on the Japanese yen’s demise. More aggressive traders can also take a look at a leveraged ETF, the ProShares UltraShort Yen ETF (NYSEArca: YCS). But investors should note that YCS can be extremely volatile. [Japanese Yen ETFs Tumble as Dollar Breaks 100 Yen]
The WisdomTree Japan Hedged Equity (NYSEArca: DXJ) and iShares MSCI Japan (NYSEArca: EWJ) are the two best-selling ETFs in 2013 as investors rode the rally in Japan. DXJ, though, has been outperforming EWJ as the WisdomTree ETF hedges against the depreciating yen. [Japan ETFs Rocket as Nikkei Tops 14,000]
For more information on Japan, visit our Japan category.
Max Chen contributed to this article.