Several weeks ago I made a passing reference in a weekly review to having begun to take an interest in the Japanese stock market, as it was starting to show signs of positive movement. This trend has continued and in recent days the iShares Japan ETF (ticker: EWJ) has begun to accelerate and outperform the S&P 500:
The relative strength is most commonly attributed to Yen weakness, which would be bullish for the stocks of export driven Japanese firms. Over in the currency markets, there is talk of the Yen carry trade reviving. This is a trend we should watch as it is potentially profitable.