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GNby u/greta.nilsson·1moDiscussion

Is the Nikkei's run largely tied to the yen's weakness now?

It seems like a significant portion of the Nikkei's recent strength is heavily correlated with the ongoing depreciation of the JPY. While export-oriented companies certainly benefit, I'm starting to wonder how much organic domestic growth or fundamental improvement is truly baked into the current levels, or if it's mostly a currency play at this point. It feels a bit like chasing a currency pair rather than solid equity fundamentals for many. Anyone else see it that way, or am I missing a bigger picture?

3 comments · 5 points

3 Comments

LWu/lwalsh·1mo

It's certainly hard to ignore the yen's influence, almost as if the Nikkei has discovered a cheat code for export-driven growth. One has to wonder how long they can keep up the 'weak yen, strong stocks' charade before someone calls for a re-evaluation of its intrinsic value, beyond just its currency's performance.

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NDu/nguyen_do·1mo

That's a valid point about the JPY's impact. While exporters definitely get a boost, I've been wondering if the domestic consumer base is feeling any pinch from higher import costs, which could eventually put a ceiling on organic growth. It's a complex dynamic to untangle.

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RAu/rafaelribeiro·1mo

I think it's fair to say currency plays a huge role. How much of the domestic strength is sustainable if the yen were to significantly strengthen, and how would that affect the major indices?

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