Japan’s stock market has been facing challenges due to the rapid appreciation of the yen, impacting the export competitiveness of the country’s manufacturers. The yen reached a seven-month high against the US dollar on Monday at around 143 before slightly decreasing to 146 on Tuesday.
The surge in the yen was triggered by the Bank of Japan (BOJ) signaling a more hawkish stance on monetary policy in recent weeks. This led to the unwinding of yen carry trades, a popular investment strategy where investors borrow cash at low rates in Japan to invest in higher-yielding assets in other currencies.
