Nearly three weeks ago, the Bank of Japan announced it would be injecting $1.4 trillion into the economy as a stimulus measure. Stocks rallied on the news while the Japanese Yen sold off hard. Since the beginning of 2013, we've recommended shorting the Yen. Central bank intervention is commonplace these days and the effect it has on the currency and stock markets is quite powerful. The Nikkei 225, Japan's version of the S&P 500, made new year-to-date highs today, touching 13,568, up +1.9%. That puts the index at a whopping +31.5% year-to-date, making it the second best performing stock market in the world (Venezuela is #1, up +37% year-to-date).
The chart below shows the performance of the USD/JPY (US Dollar relative to the Japanese Yen) currency cross and as you can see, the dollar has gained significantly against the Yen over the last year.