Got a Yen for Japan?

Feeling bullish on Japan? ETFs can help.

Investors betting against the dollar have been burned this year by the greenback's rise. Even so, some fund managers say the Japanese currency has reached bargain levels, making it a good time to look at Japanese stocks and the yen.

One way to do that would be to buy a Japan-based open-end mutual fund that doesn't hedge currency exposure. Unfortunately, actively managed international funds tend to be pricey, with expenses that can cost close to 2% of assets per year.

A far cheaper way to play a possible yen rebound would be to buy the iShares MSCI Japan (EWJ) exchange-traded fund.

The EWJ tracks the MSCI Japan index by holding 284 Japanese stocks. It offers a comparatively low expense ratio of 0.59%.

The EWJ ranks as one of the top 10 ETFs in terms of net assets, with close to $7 billion. That puts it roughly on par with the Diamonds Trust (DIA) ETF, which tracks the 30 stocks held in the widely watched Dow Jones Industrial Average. Sizewise, the S&P SPDR (SPY) tops the list at $51 billion.

The EWJ is also among the leaders when it comes to volume. Over the past three months, the EWJ's average daily volume has risen to just over 8 million shares per day, once again putting it in the top 10 for all ETFs -- though not in the class of the Nasdaq 100 Trust(QQQQ), or QQQQ, which leads all ETFs by trading over 100 million shares a day.

In terms of performance, the EWJ is down a painful 9.1% year to date. That includes 4.3 points worth of currency losses, as the yen has moved above 107 to the dollar from 103 in January.

Should the yen strengthen or the dollar stumble, the unhedged EWJ would thrive. Of course, as Lisa Chen, portfolio manager for the Barclay's Global Investors, the company behind the iShares brand, reminds us, the EWJ is not simply a pure play on the Japanese currency.