Weakened Yen Boosts Japanese Stocks as Exports Surge

The Japanese yen has been weakening against major world currencies for years, but despite this trend, Japan's stock market is outperforming. The country's exports are rising, driven in part by a 29% increase in shipments of semiconductor equipment.

The Bank of Japan has kept its benchmark interest rate low for years, making it less attractive to global capital and leading traders to sell the yen to buy the dollar. However, this has not had a negative impact on the Japanese economy or stock market.

In fact, Japan's economy expanded at an annualized rate of 2.1% in the first quarter, beating expectations. The country's exports are rising, driven by strong demand for its electronics and industrial equipment.

The iShares MSCI Japan Index Fund (NYSEMKT: EWJ) is up about 19% this year, outperforming the S&P 500 index, which is up around 13%. Several sectors are driving Japan's market higher, including technology, financials, basic materials, and industrials.