The weaker yen has driven Japanese equities.
IG Markets Singapore noted:
Traders in Asia may have been gearing up for some consolidation and profit-taking after last week’s major gains. But with the upbeat economic data released on Friday they may be reassessing their positions.
Across the region, Japan’s Nikkei 225 was playing catch-up after a break and rocketed 2.8%. The weaker yen has been a stronger driver for Japanese equities and this theme is likely to continue for now, as the consensus from analysts is to have revised their USDJPY targets higher, with many now looking above 90.
With the cross currently sitting just above 88 these targets might be achieved sooner rather than later, especially given the momentum that has been gained in recent months and the noises that we keep hearing from the BoJ with regards to policy direction.
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