On August 12th we posted that the were buying Japanese stocks.
Since Yellen’s comments last Friday, our Japan trade has been working out quite well:
Here’s a chart of the Japanese Yen:
A weaker Yen is seen as a positive for Japanese stocks given their orientation towards exports. As such, Japanese stocks have also caught a bid:
Here’s a chart of the TOPIX Index:
Compared to other major developed markets, Japanese stocks still look relatively cheap. Currently the TOPIX Index has a P/E of 16.91 and a dividend yield of 2.2%, compared to a P/E of 20.41 and a dividend yield of 2.12% for the S&P 500 Index.