Yen crashes to 40-year low while AI chip demand surges — long Japanese semicondu
Thesis
When a country's currency collapses, its major export companies get a massive financial windfall because their overseas sales are suddenly worth a fortune when converted back to the weak local currency. The yen hitting a historic 40-year low practically guarantees surging profit margins for Japan's massive chip equipment makers like Tokyo Electron and Advantest. We can pair this currency tailwind with the global AI boom, as Wall Street notes that Nvidia, Micron, and Broadcom are steering the entire global market right now. Japanese stocks are already set to climb on the currency move, but Japanese semiconductor companies offer a double-catalyst of a weak yen and relentless global AI demand.
Strategy approach
Build a momentum strategy on D1 that enters long Tokyo Electron (8035.T) and Advantest (6857.T) when the Nikkei 225 makes a new 20-day high and USD/JPY is trending upward above its 50-day moving average. Require RSI on the Nikkei to be above 55 to confirm bullish momentum. Exit with a 12% trailing stop or if USD/JPY drops 3% below its recent peak (signaling yen intervention risk).