BlackRock Warns Weak Yen Deters Foreigners From Japanese Stocks

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Japanese Stocks,Yue Bamba,Foreign Investors

(Bloomberg) -- The yen’s weakness is turning foreign investors away from Japanese stocks. Most Read from BloombergPutin Replaces Long-Time Defense Minister...

The Nikkei 225 Stock Average has jumped 14% this year, outperforming its global peers. But for dollar-based investors, the gains shrink to just above 3% after the yen’s tumble to a 34-year low against the greenback. That’s far below the S&P 500’s increase of 9.5% and the Hang Seng Index’ dollar-based returns of 11%.“Investing in Japanese equities becomes harder if the currency continues to weaken,” said Yue Bamba, head of Japan active investments at BlackRock Inc.

The yen traded around 155.40 to the dollar on Friday in Tokyo, a level that Bamba considers “undervalued.” The yen’s fair value is “much higher” than the current levels, “easily in the 130s,” he said. If the yen strengthens past 150, overseas investors will feel comfortable coming back to the market, he said.

Hedge funds on the other hand are betting on an even weaker yen. Short-term funds have started buying option in the 160 to 161 range. Three growth stocks are sound investment prospects and future giants for their visible growth potential. The post The Future Giants: 3 Emerging Stocks With Incredible Growth Potential appeared first on The Motley Fool Canada.Portfolio Payday: 2 Ultra-High-Yield Monthly Dividend Stocks to Buy in May 2024

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