Japanese stocks scaled six-month peaks on Friday as the yen took a spill, though other Asian markets lagged behind as investors become resigned to an inevitable slowdown in U.S. stimulus.
Tokyo'svNikkei put on 0.7 percent, making a meteoric 10 percent rally in just 11 sessions and setting the scene for a re-test of its 2013 peak at 15,942.
The Nikkei and the yen have been dancing in counter step for months, with every rally in the former a signal for speculators to dump the yen. A lower currency then promises to boost Japanese exports and earnings, so further supporting shares.
So the U.S. dollar spiking above 101.20 yen for the first time since July was a clear green light to buy shares. The euro also climbed as far as 136.45 yen, highs not seen since October 2009.
"In the last 24 hours, the yen's price action has been tick for tick with the Nikkei," said Alan Ruskin, global head of FX strategy at Deutsche Bank in New York.
Bank of Japan Governor Haruhiko Kuroda gave his blessings to the move, saying the yen was not abnormally low and there were no signs of a bubble in shares.
At the same time, a swing higher in long-term U.S. Treasury yields was expanding the dollar's rate advantage over the yen.
Source: Reuters
