What a strengthening yen means for Japanese equities

Stronger yen will translate into larger current account surplus

The strengthening of the yen in early 2018 to 110 against the US dollar means the market is already buying the rumour of a potential rate rise.

The yen will strengthen further against the dollar as Prime Minister Abe's administration aims for at least one-fifth of Japan's energy consumption to come from nuclear power by 2030. Ruffer: The 'intensely interesting' opportunity in Japan This will translate into a larger current account surplus as Japan imports less and less energy.  The currency's appreciation will not impact trade volumes and export-driven business activity, but it will impact exporter earnings - as their yen-denominated sales will be lower due to the translation effect. As a result, consensus expects low s...