1031 GMT - As the yen languishes at 40-year lows against the dollar, there are silver linings for Japan equities plays. BNY Investments' Aninda Mitra says a weaker yen tends to favor large corporates that are more globally diversified, yielding direct FX transmission gains for EPS. Now, it does drive up imported inflation, but for now that seems to be shielded by government measures like price caps. That doesn't quite shield SMEs from higher input costs, but they tend to be a much smaller component of the MSCI Japan index, or Nikkei, or other indexes. The yield curve is also quite steep, and that tends to favor financial companies. "We've liked those trades as well...Large-caps and financials have kept us generally favorably disposed towards Japanese equities more broadly." (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

July 03, 2026 06:31 ET (10:31 GMT)

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