Tokyo Says ‘Hold My Sake’ to the Lost Decades 

Japan is probably my favorite country to visit in the entire world.

I’ve been fortunate enough to be able to do that a half dozen times over the years. Whenever I’m there, I’m reminded how much I love it.

The food, the culture, the history. It’s awesome. 

Did I mention the food?

There’s a park in Tokyo, basically the grounds surrounding the Imperial Palace.

In 1989, this land was worth more than all of the real estate in the entire state of California combined.

And that’s when the Japanese stock market crashed. 

Japan Today

I’ve been to this plot of land. It’s nice.

But more than all of California? 

It’s no wonder it took Japan more than 35 years just to get back to these levels.

But here we are.

Look at Japan’s Nikkei closing up the quarter at its highest prices ever – finally exceeding those 1989 highs:

Nikkei 225 chart from 1970s to 2020s. Peak in 1989, declines, then new all-time high noted in 2020s.

For perspective, when Japan’s bubble peaked, Michael Jordan didn’t have any NBA championships yet.

Tiger Woods was 13 years old and playing in his first major national junior tournament.

Funny enough, he was paired with then-unknown pro golfer John Daly, who beat Tiger by one stroke. 

That was a long time ago.

But we’re back. 

Japan is at new all-time highs once again.

It’s the Stocks, Not the Currency

A lot is said about the Japanese stock market and whether the weaker yen is what’s driving prices up. 

And, over time, we can make that argument, sure.

But I prefer to look at the data.

First off, take a look at the WisdomTree Japan Hedged Equity ETF (DXJ), hedged in yen.

In other words, this ETF gives investors the ability to own Japanese stocks priced in their local currency.

It just closed the week at new all-time highs:

Chart of WisdomTree Japan Hedged ETF (DXJ) shows a rise with a new all-time high circled in green, indicating upward momentum.

This is impressive. And investors here in the United States are making a ton of money on DXJ.

I’m friends with the folks over at WisdomTree. They know how much I love this vehicle they’ve built. I tell them all the time.

But now let’s take a different look.

Here’s the iShares Japan ETF (EWJ), which prices Japanese stocks in U.S. dollars. So this one is not hedged, like the WisdomTree ETF.

This one doesn’t get the benefit of a weaker yen:

Candlestick chart of iShares MSCI Japan Index ETF (EWJ) from 2021 to 2026, showing a new all-time high in 2025, highlighted in green.

It’s not the currency.

It’s the stocks.

 So What’s the Solution?

A good question to ask here – one that certainly comes up all the time – is which one do we want to own?

Do we want to own Japanese stocks priced in the local currency or the US dollar?

My follow-up question usually revolves around whether you want to be a currency trader or if you just want exposure to Japanese stocks.

Because if the answer is the latter, my friend Todd Sohn has a great solution.

Todd is the Senior ETF & Technical Strategist at Strategas Securities, and he does a better job of analyzing ETFs and their fund flows than anyone else I know.

I don’t say that because he’s a friend. Todd really is the man.

And his suggestion is a fantastic one.

If you’re interested in owning Japanese stocks but don’t want to play the currency game, you can own both DXJ, which prices Japan in yen, and EWJ, which prices Japan in the U.S. dollar.

If you own both, the currencies offset each other, and you just own Japanese stocks.

If that’s what you’re trying to do in the first place, and not play Forex Trader, there you go!

And, with Japan making new all-time highs, this is an area we want to keep looking to for exposure.

But wait, there’s more…

Japan Part Deux

I told you how much I love visiting Japan. I’ve been to baseball games out there, and even got escorted off the floor of the Tokyo Stock Exchange.

There are stories about Japan that I haven’t shared yet.

We’ll leave it here for now.

But stay tuned, because I need to tell you what sumo wrestling taught me about investing…

Stay sharp,

JC Parets, CMT
Founder, TrendLabs