CNBC's Bob Pisani Discusses Japanese ETFs Following Bank Of Japan's Meeting

CNBC's Bob Pisani discussed in his latest "

" segment how investors can gain better access to Japan-based stocks and how to avoid the effect of currency fluctuations.

Pisani noted that the Bank of Japan declined to introduce new stimulus measures in its meeting on Thursday which resulted in the Nikkei index falling more than 3 percent. In fact, the Japanese index has now recorded a double digit percentage loss.

However, Pisani added that Japanese ETF remain "among the largest country ETFs out there," the biggest being iShares MSCI Japan ETF EWJ, which has been trading since 1996. He added that the ETF market cap adjusted and includes the "big names" such as Toyota Motor Corp (ADR) TM, among other auto manufacturers.

Pisani continued that one main problem with investing in overseas assets is currency related.

"In this case, you convert dollars into yens to buy Japanese stocks and when you cash out, you convert back into dollars," Pisani explained. "The currencies can fluctuate in value and dramatically affect your returns independent of the stock returns."

Pisani added that investors can mitigate currency fluctuations by investing in an ETF that is currency hedged. In this case, investors could consider the WisdomTree Japan Hedged Equity Fund DXJ – an ETF that offers similar exposure to Japanese equities but utilized hedges to counteract any currency impact.

Finally, Pisani pointed out that the currency hedged ETF is underperforming the non-hedged iShares ETF this year. This is because the yen has appreciated against the U.S. dollar this year.