However, the yen has bounced back as traders have looked for safe-haven alternatives to the U.S. dollar. It is not a coincidence that as EWY has traded higher over the past month, the CurrencyShares Japanese Yen Trust (NYSE: FXY) has gained more than 3%.
The Bank of Japan has few options left to weaken the yen in the near-term and if forex markets continue to price in upside for the Japanese currency, export-dependent South Korea and EWY, an ETF that reflects the country’s sensitivity to exports and yen price action, should benefit.
iShares MSCI South Korea Capped ETF
ETF Trends editorial team contributed to this post.