The yen’s weakness is causing foreign investors to turn away from Japanese stocks.
The Nikkei 225 Stock Average is up 14% this year, outperforming its global peers. But for dollar-based investors, gains shrink to just above 3% after the yen fell to a 34-year low against the dollar. That’s well below the S&P 500’s 9.5% gain and the Hang Seng Index’s 11% dollar-based returns.
“Investing in Japanese stocks will become more difficult if the currency continues to weaken,” Yue Bamba, head of Japanese active investments at BlackRock, said in an interview in Tokyo. “When you talk to global investors about Japan, FX is certainly a priority for everyone.”
