Current BOJ Governor Masaaki Shirakawa's term ends in April and markets are positioned for
further yen weakness as most expect him to be replaced by someone whose stance on aggressive policy easing matches that of Prime Minister Shinzo Abe.
If Japan's central bank continues to suppress 10 - year yields in Japan, that could lead to
further yen weakness, which would be good for their exporters.
Not exact matches
We see
further upside, despite tepid domestic growth and relatively low corporate margins from an international perspective, as
yen weakness should boost earnings.
And Japanese large caps are generally the most export - focused companies, so (
further)
yen weakness is more likely to benefit them anyway.