Major decline in yen hands TOPIX record consecutive gains

The Japanese yen has is trading strongly today, and by 0.5 percent but since the US election, the yen has been the biggest loser among all major. After strengthening to 101.3 per dollar, right after it became clear that Donald Trump will win the election, it has weakened by 1270 pips in 13 trading days. This major weakness in the yen has been a major bullish factor for Japanese stocks.

After declining to 16110, Nikkei has soared on the weakness of the yen to 18480. Currently, it is trading at 18300. The run has been even greater for TOPIX index in Tokyo, which rose for the 11th consecutive day. There have been five separate occasions in history when TOPIX rose for 11th consecutive day or more but in none of those instances the gains were larger than current 12.6 percent. In February/March 1988, TOPIX rose for 15 consecutive days but gains were 9.74 percent. In July 2009, TOPIX rose for 13 consecutive days but gains were 10.7 percent, previous record.

We suspect, there could be a correction coming in the index as the US election outcome once again plunges to uncertain territories.