The Nikkei market reached its highest level since August 2008 today (April 8th) as the Japanese yen fell to a near four-year low.
As a result of the radical monetary easing policies announced by new Bank of Japan (BoJ) governor Haruhiko Kuroda on Thursday, the currency has weakened dramatically, boosting Tokyo stocks.
The Nikkei 225 stock average advanced by 2.8 per cent on Monday as a further slide in the yen served to increase the competitiveness of Japanese exports.
However, trading is much more mixed away from Tokyo, with concerns over the potential conflict in the Korean peninsula, a new strain of bird flu in China and poor US payroll data all serving to stunt progress early in the week.
Since the BoJ policy announcement, the yen has fallen by one per cent, with the US dollar trading at 98.84 yen as of 9:00 BST.
Barclays Capital has suggested the currency could reach 103 yen per dollar within the next three months.
"We expect further weakness ahead, given the bank's clear commitment to achieve its two per cent [inflation] target," it stated.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.