The long-standing inverse correlation between the yen and Japanese stock prices has broken down, suggesting the Nikkei could rise even if the Japanese currency doesn't weaken further, analysts say.

"The rise in the Nikkei and its decoupling from a weaker yen is driven not by fundamentals but depends on the flow of money from pension funds," said UBS Japan equity strategist Tomohiro Okazawa. "The relationship between the Japanese stock market and the U.S. dollar/Japanese yen (pair) has been strange since mid-February."

The Nikkei rose 7 percent in February to a fifteen-year high even though yen only weakened by 1.4 percent against the dollar.

Seismic wave of public money

The inverse correlation between the yen and Japanese stock prices has held since 2006, according to UBS's Okazawa.

The correlation's strength was evident over the past few years: since Prime Minister Shinzo Abe returned to power in December 2012, triggering a stock rally with his promise to return Japan to economic growth, the Nikkei has risen over 100 percent, while the yen weakened by 45 percent.

But a wave of public money appears to be upending that trend after Japan's Government Pension Investment Fund (GPIF) raised its stock holding allocation to 25 percent from 8 percent in October.