The Nikkei, Japan's stock benchmark, posted its biggest daily gain in nearly two years. The index moved up 3.8 percent to close at its highest level since October 2008.
The reason behind this move is easy to explain: the yen is nosediving.
A 3.8 percent move is huge. For the sake of context, that would be equivalent to the Dow moving 500 points...in a single day.
The immediate news is that Bank of Japan Governor Masaaki Shirakawa will leave his position earlier than planned. The yen plunged to a 33-month low on hopes Shirakawa's replacement will speed up aggressive monetary easing.
The weaker yen is certainly helping Japanese companies. Toyota and Mitsubishi Heavy Machinery both hadbullish commentary recently.
Several ETFs have seen greatly increased inflows off the Japanese stock/yen play: the big winner has been WisdomTree Japan Hedged Equity, which invests in Japanese stocks buy hedges against the weak yen--huge inflows since December.
The CurrencyShares Japanese Yen — a play on the dollar/yen exchange rate — have also seen increased flows, although much of that is like money flowing out of the fund as the yen sinks.