The yen has declined from 76.75 at the beginning of 2012 to current levels of over 93. The Nikkei index has moved from 9,000 to over 11,000. GDP has not yet moved positive in the fourth quarter but retail sales are up. The "Great Yen Decline" is starting to have an effect on the real economy. Since the equity rally started in the US in March 2009, the SPX has been up 121.4% while the NKY has increased by only 58.68%. In the last year, the NKY has outperformed and gained close to 17% versus 12% for the SPX. In the last six months, the differential has been in the favor of Japanese equities by just under 20%. The market believes these new policies will work.
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