The yen has soared, but the Japanese stock market has fallen one after another. The reasons behind this "divergence" phenomenon are worth exploring in depth. The traditional view is that the appreciation of the yen should increase the attractiveness of yen assets, but this is not the case.
To understand this, we need to review the background of "yen depreciation and Japanese stock market surge". Since 2021, this wave of market has not been a simple "depreciation bull market", but has been driven by arbitrage behavior. Take Buffett as an example. He borrowed low-interest yen in the early stage of yen depreciation and invested in the Japanese stock market to make a profit. The operation logic is clear: by betting on the trend of yen depreciation, taking advantage of Japan's low-interest environment to earn risk-free profits, and profit from the rise of the stock market. However, as market conditions change, this arbitrage mechanism is unbalanced, causing the Japanese stock market to fall, while the yen trend has shown new trends.
In the current situation, this complex interaction is redefining the relationship between the yen and the Japanese stock market.
