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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Bonefish who wrote (47054)	12/11/2005 8:15:31 PM
From: Wyätt Gwyön	Respond to of 110194

Strangely enough Japan funds are rocketing in the face of it not that strange, really--a weaker yen greatly benefits the yen-denominated profitability of Japanese exporters. cos like Toyota have huge EPS sensitivity to the value of the yen. in short, the weaker the yen, the better. the more yen profits they have, the more they can spread through Japan's economy, spreading the benefit to non-export sectors. of course, the weaker yen is a headwind for the, e.g., USD-denominated profits of overseas investors in the Japan stock bull market. the overseas investors can hedge their JPY exposure, but they do that by shorting the yen, which exacerbates the weakness of JPY.