The yen¡¯s weakness is turning foreign investors away from Japanese stocks.
The Nikkei 225 Stock Average has jumped 14% this year, outperforming its global peers. But for dollar-based investors, the gains shrink to just above 3% after the yen¡¯s tumble to a 34-year low against the greenback. That¡¯s far below the S&P 500¡¯s increase of 9.5% and the Hang Seng Index¡¯ dollar-based returns of 11%.
¡°Investing in Japanese equities becomes harder if the currency continues to weaken,¡± Yue Bamba, head of Japan active investments at BlackRock, said in an interview in Tokyo. ¡°When you speak with global investors about Japan, FX is definitely top on the mind for everyone.¡±
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