Yen hits 40-year low, Japanese stocks near records — momentum play on Japan
The Japanese yen has crashed to its weakest level in 40 years, and this is actually making Japanese companies more valuable. Investors are piling into Japanese stocks, pushing them toward record quarterly highs.
Idea
The yen hitting a 40-year low is a massive tailwind for Japanese exporters, whose products become cheaper for the rest of the world to buy. Bloomberg reports Japanese stocks are set to climb on this exact dynamic. Meanwhile, Reuters notes that Asian stocks are on track for a record-breaking quarter. We connect these because the currency move directly amplifies corporate earnings for Japanese firms. As long as the yen stays weak without triggering a government intervention panic, Japanese equities have a strong fundamental floor under them.