So investors are bullish on Japan once again. Yet much of the $28-billion (U.S.) in foreign money that has flowed into Japanese stocks since early November is still riding on expectations. The Bank of Japan’s commitment on Tuesday to try to achieve 2-per-cent inflation “at the earliest possible date” remains a target only. Meanwhile, there are many reasons why the yen may not depreciate as the consensus view predicts. The latter point is key because the negative correlation between the index and the dollar-yen exchange rate is at its highest in four decades.
(Itsuo Inouye/AP)
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