Japan Stock Rally Fate Found in Watching Won: Chart of the Day
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The best gauge for determining how far Japan’s resurgent stock rally has to run may come from watching the yen’s performance against South Korea’s won.
The CHART OF THE DAY tracks the relationship between Japanese shares and the won’s level versus the yen. Deutsche Bank AG forecasts the won will rise to 0.108 yen by year-end as the U.S. recovers, spurring an 8 percent rally in the Topix index to above 1,400 for the first time since June 2008. The lower panel shows Japan’s U.S. exports alongside annual revenue at Sony Corp. and Toshiba Corp. A stronger won makes exports of Korean rivals such as Samsung Electronics Co. less competitive.