Nikkei Near 18 Year High Thanks to Soft JPY

Japan’s benchmark stock index neared a four-week high Monday, bringing it within touching distance of an 18-year high, thanks to a weakened yen which has come back into focus as events in China and Greece die down.

After an extended weekend, the Nikkei 225 climbed 0.9 percent to trade at 20,841.97 Tuesday, just shy of 20,933 reached last month – its highest finish since December 1996.

Investors will be watching closely as earnings season kicks off in Asia later this week, with a “lack of investor interest” in the dollar against the yen likely to prove positive for further weakening in the Japanese currency, according to UBS.

“With China and Greece dominating the recent news flow, Japan remains off the radar of many investors,” Daniel Waldman, a currency strategist at UBS, said on Tuesday.

“However, with inflation still low, the Bank of Japan’s reflation efforts are likely to remain significant in the second half, further benefiting long dollar/yen, where we remain bullish and think risk-reward is strong.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza