A stronger yen and the unwinding of the carry trade will benefit Japan, according to Monex Group's Koll.

• According to veteran investor Jesper Koll, the corrections in the yen and the unwinding of its carry trade are actually quite healthy.
• Koll believes that up to 75% of the yen carry trade could be unwound, and he predicts that the BOJ will raise interest rates to approximately 1.5% by August next year.

The unwinding of the carry trade and corrections in the yen are positive developments for Japan, according to Jesper Koll, a seasoned investor who maintains a bullish outlook on the Japanese market.

According to Koll, an expert director at Monex Group, the strategy of focusing on the real Japan strategy rather than a quick carry trade is crucial for investors. This involves borrowing at close to zero interest rates in Japan and investing in high-risk assets.

Last week, the Bank of Japan raised interest rates, causing the yen to strengthen and resulting in a significant market sell-off worldwide.

Koll stated that the violent correction the Nikkei received last week was beneficial, as it was caused by the weakness of the yen.

According to Koll, an economy that operates on zero interest rates and has a central bank controlling the purchase of government debt is not the definition of a capitalist economy.

Last week, Jean-Claude Trichet, the former head of the European Central Bank, stated on CNBC that the correction in the U.S. dollar-yen exchange rate was long overdue and would likely benefit markets.

The carry trade could have been unwound by up to 75%, although the total size of the carry trade is not accurately known, according to Koll.

After experiencing significant losses at the beginning of the week, Japan's Nikkei 225 stock index experienced a sharp recovery. On Tuesday, it increased by as much as 3%.

According to Koll, the financial markets were more concerned about the possibility of a hard landing in the U.S. and a collapse in the U.S. two-year Treasury note than they were about the Bank of Japan's decision to increase interest rates.

Last Wednesday, Bank of Japan deputy governor Shinichi Uchida stated that in order to cope with global instability, the bank must continue with its current monetary easing policy, keeping the interest rate unchanged.

Despite Uchida's statement, the BOJ summary of monetary policy meeting revealed a readiness among policymakers to increase rates.

The BOJ is predicted by Koll to abandon its cautious approach and normalize interest rates, with the policy rate expected to be approximately 1.5% by the end of the year.

Shifting the focus from Japan's "froth economy" to its domestic economy, he said, adding that corporate restructuring and a sustained growth in real wages make a bullish case for Japan.

In June, Japan experienced its first wage increase in 26 months, with real wages growing by 1.1% compared to the previous year.