It was not much of surprise, but on Wednesday, President Obama nominated Federal Reserve Vice Chairwoman Janet Yellen to succeed Ben Bernanke atop the Fed when Bernanke retires early next year.  Assuming she is confirmed, and it appears she will be, Yellen will be the first woman to lead the U.S. central bank.

Yellen and her team should be happy that Koichi Hamada, an adviser to Japanese Prime Minister Shinzo Abe, is not a U.S. senator because it is unlikely Hamada would vote to confirm Yellen. Hamada, one of the architects of Abenomics, is concerned Yellen will keep the Fed’s loose monetary policy in place, potentially causing the yen to spike while leaving Japan’s economy vulnerable to shocks, reports Toru Fujioka for Bloomberg News.

The yen has fallen 20% this year, making it the worst-performing developed market currencies. That has been a boon for Japan ETFs. The iShares MSCI Japan ETF (NYSEArca: EWJ), the largest Japan ETF by assets is up 21%. The db X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) and the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) have gained an average of 27%. [Abe Bolsters Japan ETFs]

DXJ and DBJP are currency hedged plays, meaning they are positively levered to USD/JPY strength.  The hedged currency theme could be the next big thing in the ETF universe as DXJ has shown. DXJ has hauled in $8.7 billion in new assets this year, making it the top asset-gathering ETF.  [Currency Hedged ETFs for a Stronger Dollar]

Any sustained strength in the yen would likely imperil DXJ and DBJP while making EWJ, which is not currency hedged, less bad than its rivals. Earlier this week, Hamada said the Bank of Japan “must be ready to act if a stronger yen damages the world’s third-biggest economy,” Bloomberg reported.