Investors should not discount yen’s impact on performance of Asian markets, economies: observers

INVESTORS should not ignore the impact that the weak Japanese yen has on Asian markets and economies, given how integral Japan’s economy is in the region, market observers said.

The yen’s weakness is a major reason why currencies in Asia have not moved much, which in turn has weighed on regional markets and economic growth, they added.

“I would not discount the distortions that the yen is causing right now. That is often a point that’s missed by markets, given how Japan’s presence in Asian currency trade baskets is significant,” said Geoffrey Yu, senior Europe, Middle East and Africa market strategist at BNY. “No matter how we look at it, Japan is a major trading partner for all of the countries in the region, and the yen is tremendously undervalued right now,” he said.