Japan's stockmarket gets a boost from the weak yen

Japan’s stockmarket has outperformed so far this year, with corporate profits at their highest since 1954 and a weak yen inflating overseas earnings.

Street in Osaka
Japan has a chance to break free from decades of deflation
(Image credit: © Getty Images)

Japan “has a chance to break free from decades of low or no inflation”, says The Economist. The aftermath of the Covid-19 pandemic and the global surge in commodity prices “seem to have done what years of loose monetary policy could not”. Annual inflation hit 2.6% in July, with the Bank of Japan (BoJ) expecting inflation of 2.3% for the current fiscal year. Excluding sales tax rises, that “would be the first time prices outstrip the bank’s 2% target since it was introduced in 2013”.

Rising prices have generated some disquiet domestically, but Japan’s inflation is “quite mild” compared with levels in many other developed countries, says Aaron Beck in The Wall Street Journal. The BoJ looks unlikely to “flinch” from its current ultra-loose monetary policies.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Explore More
Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.