Weak Yen Fails to Boost Stocks as Expected

Apr 29, 2024 | News On Japan

TOKYO - On April 26, the Nikkei Average closed up 306 points at 37,934 yen, despite a rapidly weakening yen. Experts are noting a shift in the typical correlation between a weak yen and strong stock performance, suggesting that the previous dynamic may be weakening.

Hiroki Hiroki, Chief Strategist at Monex Securities, commented, "There's a sense of caution about intervention; it's unpredictable when it might occur. There is a growing call for the Bank of Japan to halt this yen depreciation, which is increasing speculation about an early interest rate hike by the BoJ. Slowly, these factors are emerging as negatives for the stock market."

Over the weekend, the Dow Jones Industrial Average in New York finished up by more than 150 points, and futures for the Nikkei Average also recovered to the 38,000 yen level.

Regarding this week's market movements, Hiroki further noted, "The focus is on the U.S. Federal Open Market Committee (FOMC) meeting scheduled for May 1-2 (Japan time). The outcomes of this meeting and the subsequent movements in U.S. long-term interest rates and stock prices are likely to have a more significant impact on the Japanese stock market than domestic factors."

Source: ANN

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