In the days leading up to and following this past Sunday’s Japanese election, various experts have been advocating selling the yen and buying Japanese stocks. Their view was that a change in leadership means the country will soon embark on an aggressive round of money printing that will weaken the currency and benefit Japan’s export-sensitive industries.
I believe they are right (in the longer-term, at least). In fact, I posted two commentaries (including custom charts) at Panzner Insights, my members-only website, on Japan’s currency and its equity market, on November 21st and November 23rd, respectively, where I essentially argued the same thing.
Needless to say, those of you who believe this perspective makes sense would probably agree that if would have been better to hear about it a month ago, when the yen-dollar rate was 2 percent higher and Japan’s Nikkei-225 index was almost 6 percent lower.