The yen depreciated the most in history. So is the Japanese stock market still worth investing in?

Kasikorn Securities Company Issued an analysis that in the midst of the weakening of the yen due to the measures of the Bank of Japan (BOJ), it continues to implement an accommodative monetary policy, contrary to developed countries like the United States or Europe. The movement touched depreciation at around 149 yen per dollar. If since the beginning of the year the yen has depreciated at 22% (information as of 25/10/22) and it is found that the yen has weakened the most in 32 years.

However, Kasikorn Securities It is seen that the Japanese economy still has various driving factors and is beginning to show a good recovery trend, supported by 4 factors as follows.

1. Moving forward with full opening of the country

2. The depreciating currency has a positive effect on export stocks and helps support the tourism sector.

3. Profit forecasts for listed companies in many industry groups have continued to be raised.

4. Valuation is at an interesting level. The stock price is lower than the historical long-term average.

An issue that investors must monitor is the pressure factor from the Japanese authorities that may intervene further in the currency due to inflation starting to exceed the BOJ's target, which will affect domestic consumption. Including Japan, focusing on imports, especially the energy group. As a result, import costs have increased. Pressure on the balance of trade and services Including the operating results of listed companies as well.