The seemingly relentless appreciation of the yen against the dollar has not caused quite the degree of panic in Japan’s equity markets that might have been anticipated. In part this is because the yen is still a touch weaker now in trade-weighted terms than it was before the intervention in September. The main driver of dollar weakness has also been anticipation of further large-scale quantitative easing by the US Fed, which is a positive for asset prices globally including equities in Japan.
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