As major overseas economies enact loose monetary policies to stimulate growth and counteract deflationary pressures, other countries will follow suit, fueling a currency war that could further strengthen the U.S. dollar.

A gauge for the U.S. dollar is currently hovering around its highest in five years. The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) is up 8.6% year-to-date, trading near its highest level in over four years. UUP tracks the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. [Making Sense of Dollar Strength]

Japan has been actively weakening its yen currency against the U.S. dollar, with the Bank of Japan increasing the scope of its quantitative easing program, reports Nouriel Roubini, a professor of economics at NYU’s Stern School of Business, for MarketWatch.

The PowerShares U.S. Dollar ETF includes a 13.6% tilt toward the Japanese yen. [Expect Prolonged Dollar Strength]

The CurrencyShares Japanese Yen Trust (NYSEArca: FXY) declined 11.3% year-to-date. Meanwhile, the ProShares UltraShort Yen (NYSEArca: YCS), which tries to reflect the daily -2x or -200% daily return of the USD/JPY currency pair, jumped 23.4% so far this year.

Meanwhile, other Asian countries are seeing the stimulative measures as a beggar-thy-neighbor policy in disguise. Consequently, central banks in China, South Korea, Taiwan, Singapore and Thailand have already responded by easing their own monetary policies or will do so in the near future.

For a slightly broader foreign currency exposure, the actively managed WisdomTree Bloomberg U.S. Dollar Bullish Fund (NYSEArca: USDU) has increased 6.5% year-to-date. USDU includes a 19.1% exposure to the yen, along with 3.3% to the South Korean won and 3.0% to the Chinese yuan.