Currency hedging cost Japanese companies such as Honda Motor the chance to fully cash in on a weak yen last quarter, raising the risk that investor expectations could outrun earnings.
The near 20 percent fall in the currency [ JPY= 102.49 -0.33 (-0.32%) ] since October has been a primary driver of the longest weekly run of gains for the benchmark Nikkei index since 1959.
But exporters may have been caught out by the magnitude of the yen's fall and bought too early, currency traders said.
"The rally is completely driven by hopes rather than facts," said Soichiro Monji, chief strategist at Daiwa SB Investments.
(Read More: Just How Low Will the Yen Go )
"We knew the yen's impact would be limited in October-December. Still I had thought the earnings would be a little bit better."
Analysts say a 1 percent decline in the value of the yen typically boosts corporate Japan's profits by about 1 percent. Auto, steel and electronics firms, all major exporters, reap the biggest benefit.
So they should be doing well in the fallout from Abenomics . New Prime Minister Shinzo Abe's drive for aggressive monetary easing and fiscal stimulus helped push the yen to a 2-1/2 year low of 92.29 to the dollar on Friday.Page 1 of 3 | Next Page