For ETF investors, currency-hedged Japan ETF options may be a better play to hedge against the negative effects of a depreciating yen while capturing potential growth from loose monetary policies. [Post-Pullback Opportunity in Japan]
As the Bank of Japan adheres to a loose monetary policy and the Federal Reserve moves toward hiking interest rates, currency risks will be an issue with overseas investments. Nevertheless, investors may utilize yen currency-hedged options to take a more pure play on the underlying Japanese markets. Some technical analysts are also highlighting potential upside for Japan ETFs.
“Liberal Democratic Party lawmaker Kozo Yamamoto, who has advised Prime Minister Shinzo Abe on economic policy, said last week the BOJ should increase annual asset purchases by at least 10 trillion yen ($83 billion),” according to Bloomberg.
iShares Currency Hedged MSCI Japan ETF
