Abandon hope, all ye who enter into a debate about currency wars. The IMF says there is no fight in the first place, while the Group of 20 largest economies just agreed to avoid one. Investors in Japan were veterans of this struggle long before it had a name and do not care so long as the yen keeps falling. Look at the dollar’s gains against the yen alongside the benchmark Topix index, and it appears they are on to something. But perhaps stocks are not following the yen so much as both are being driven by another force, namely risk appetite.

Certainly a strong yen is bad for Japan’s exporters. Popular thinking goes that a weaker one will thus lift profits and stocks. Since November 14, when Yoshihiko Noda called a general election, the yen has fallen 14 per cent against the dollar and the Topix has rallied by 30 per cent. Carmakers, as some of the biggest exporters, are among the biggest beneficiaries of a weaker currency. Toyota gains about Y38bn ($407m) in operating income – or 3 per cent of its full-year target – for every Y1 weakening, Nomura estimates. Add in the yen’s 15 per cent slide against the Korean won since November, which should hamper Japan’s biggest rivals, and exporters are in clover.

That does not make the stocks the biggest gainers from yen weakness – those are in fact banks and other financial groups. For every 5 per cent the yen weakens versus the dollar or won, the Topix banks index tends to gain 25 and 12 per cent respectively, according to CLSA. Transport stocks and the big electronics exporters add half that. That suggests the real driver is not the currency move and its profit effects so much as risk appetite. It was a flight to safety that drove the yen to its painful peaks. Now stock market volumes are up amid bets of even looser monetary policy.