There are positives and opportunities following the action by the Japanese ministry of finance to weaken a damagingly strong yen by throwing over Y1trn at it. But these are more likely to be within a managed fund environment.
There is general acknowledgement that the Japanese stock market had been held back in the last few months because of fears of the continued strength of the yen.
As John Paul Temperley, fund manager at Martin Currie which proves the Japan Alpha fund said: "This intervention in effect draws a line in the sand. The government's action effectively puts a ceiling on how much stronger the yen can get."
Performance of Japanese yen vs dollar over 1-yr
Source: Financial Express Analytics
Temperley points out the flip side of a weakened yen is that a sustained period of weakness in the currency would erode, for non-Japanese non-yen based investors, the value of their Japanese assets.
In that case it could be expected that the market would rise more than the yen would weaken. As a consequence returns would be diluted because the value of the assets would be weakening in dollar or sterling terms.
"The best thing to do is to find a fund with a hedged yen class so you get all the Japanese stock market rise but you don't dilute it by losing out on the yen weakening," he said.
Nick Duncan, investment director in the international equity team at Scottish Widows Investment Partnership (SWIP) says that as the Japanese unit trust and managed retail funds he manages are invested in the export related companies, if the yen weakens it benefits those holdings.
"The valuation of Japanese stocks is pretty low at the moment. The market has underperformed and the currency has already strengthened a lot and if you believe you are going to see more intervention and consequent yen weakness then it will benefit the market and managed funds. It is not necessarily a bad time to invest if you have a reasonable time horizon because many companies which are good and globally competitive are quite cheap."
For those still tussling over the currency/equity investment dilemma Adrian Lowcock, senior investment adviser at Bestinvest puts some wider perspective on the issue.
"The yen has fallen primarily against the dollar, as this remains the benchmark, however after initial falls the yen has recovered somewhat. The Nikkei 225 index responded positively to the announcement as local investors were relieved that the government would intervene. In the UK a stronger yen tends to be good news as the majority of fund managers do not hedge out currency movements. From 1 January 2010 to 14 September 2010 the Nikkei 225 has fallen 11.83 per cent, but when these returns are converted into sterling the index has risen by 3.39 per cent. Of course any falls in the yen would be detrimental to UK investors."
Lowcock recommends investors stick to experienced fund managers who buy quality companies that are cheap such as GLG Japan Core Alpha, JO Hambro CM Japan and CF Morant Wright Japan.
Performance of funds over 3-yrs
Source: Financial Express Analytics
Chris Saint, senior currency analyst at Hargreaves Lansdown says with regard to the implications for currency investors it remains questionable as to whether the policy to intervene will meet longer-term success in pinning back the yen, particularly given the move was not coordinated with other central banks.
"Much will depend on any policy response from the US Federal Reserve, with the yen likely to be pressured higher again if more quantitative easing in the US is forthcoming," he said.
"However, the aim was to stabilise the yen and investors will be wary of betting against the Bank of Japan in light of the potential for further intervention to come.
"The intervention policy is likely to have some positive impact for Japanese stocks via the relief of a weaker yen to exporters, but the benefit is likely to be more significant if investors can be convinced a more activist approach will be adopted in future."