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Addiction to weak yen saps Japan's growth potential

Stock market high comes at long-term cost of lower buying power

Since the yen started depreciating about three years ago, capital expenditures overseas have trended lower. 

TOKYO -- Japan is one of the few countries where a weaker currency is good for the stock market, but a closer look reveals the long-term consequences of this reliance at a time when companies need to invest abroad for growth.

Data going back to 2000 shows that for 10 out of 36 sectors in the Nikkei Stock Average, a weaker yen correlates with higher share prices. This includes industries heavy with blue chip exporters, such as automobiles and electronics, which benefit when overseas profits are converted into a weaker yen.

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