ETF investors may also look to some relatively new dynamic or adaptive currency-hedged international stock strategies. For instance, BlackRock offers the iShares Adaptive Currency Hedged MSCI Japan ETF (BATS: DEWJ), which may shift from a 0% unhedged currency exposure to a 100% fully hedged, depending on differences in interest rates, relative valuations, currency momentum and currency volatility.

“Japan’s equity market has recently become more momentum driven, reversing a long-standing anomaly in which Japan was the only major global market where momentum didn’t work but value did. The trend is an investor’s friend (but a fickle one),” adds BlackRock, the world’s largest asset manager.

Global yields have jumped on expectations that the presidency of Donald Trump would fuel inflation and growth. However, the BOJ could step in to keep the recent spike from getting out of hand. Further supporting the outlook for ETFs like HEWJ is the notion of up to three interest rate hikes in 2017 by the Fed.


For more information on the Japanese market, visit our Japan category.