Although their thunder has been stolen by other developed market currency hedged exchange traded funds, such as the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ) and the DeutscheX-trackers MSCI EAFE Hedged Equity Fund (NYSEArca: DBEF), Japan ETFs are still offering solid returns and attractive valuations.

The WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) and the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) are each up more than 5.5% year-to-date, but some investors still view the risk/reward ratio with Japanese equities as favorable.

“Consider that Japanese companies maintained profitability despite the record strong yen post-2008 financial crisis, further, in spite of the horrific triple-disaster in March 2011 and its aftermath, and later the same year, Japanese companies with manufacturing facilities in Thailand faced historical monsoon floods (not to mention the negative externalities of global supply-chain disruptions, let alone the substantial loss and damage suffered by Thai citizens). Within Japan, the domestic infrastructure is beyond reliable (timely and quick transportation of both people and goods); the landscape is largely free of the sort of crime, poverty, and dilapidation that poses challenges to businesses in cities, for example, in the U.S.; companies don’t face numerous, sometimes frivolous and expensive lawsuits as they do again, for example, in the U.S.,” writes Evan Bleker of Net Net Hunter on ValueWalk.

Japan ETFs, particularly currency hedged funds like DXJ and DBJP, have impressed this year even as the CurrencyShares Japanese Yen Trust (NYSEArca: FXY) has traded modestly higher. The two ETFs have returned an average of 31.2% over the past two years, but even with those gains, Japan is an attractively valued developed market.

Japan’s cyclically-adjusted P/E ratio, or CAPE, is 21.8, well below the historical average of 34.5 and below the current U.S. CAPE of 24.4. There is good reason for the attractive valuations found on Japanese stocks.