The Last Undervalued Investment

Buying FXY around 82.5, though it could drop as low as 76 if the bubble continues...we'll see.

The yen is already the most undervalued currency in the world. Since the collapse of the Japanese asset bubble in the late 1980s, Japan's economy has been recovering slowly -- thanks in large part to the Bank of Japan's extremely low interest rate policy. This has caused the yen to become remarkably undervalued.

Indeed, the yen hit an all-time low against the Euro last month, and its trade-weighted value was at its lowest since 1970. By some assessment, the yen is undervalued by approximately 28%. At some point, this imbalance must be corrected and the yen has to rise.