Weekly Thoughts
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Yen’s implosion will likely force BOJ to pivot
BOJ’s continued inaction followed by dovish statements in support of its ultra-loose policy have left currency traders increasingly confident in shorting the yen. We view the central bank’s policy errors not only…
June 24, 2023 -
Yen’s derating continues as do BOJ’s policy errors
Japan’s central bank left its monetary policy unchanged with its governor, reiterating the view that the bank thinks inflationary pressures will fall off below 2% and Japan’s economy is still too fragile…
June 18, 2023 -
Secular rerating of Japan stocks continues despite weaker overseas activity
Net capital inflows into Japan’s equity market are continuing and with yen remaining weak, there is near term earnings support for multinationals listed in the Nikkei 225 index which global funds typically…
June 10, 2023 -
BoJ’s chief looking to be moving the policy goal post
BOJ cheif, Ueda-san’s latest admission that the central bank’s outlook for falling inflation rate could be wrong was significant. His comments may imply that the bank could be considering dropping its insistence that…
May 28, 2023 -
Japan stocks back in vogue while we continue to prefer domestic plays
Following the last two weeks of client visits in Asia, we came away somewhat surprised about how quickly sentiment has turned very positive on Japanese stocks. To be sure, China’s disappointingly uneven…
May 20, 2023 -
Japan’s domestic-related stocks likely to continue to outperform exporters
Thus far, Japan’s stock market has been behaving relatively well with higher shareholder returns having provided a big boost to sentiment. With Japan’s corporate earnings season half way through its conclusion, we have…
May 6, 2023 -
While value investors return to Japan near term earnings risks remain
We will keep this week’s publication fairly brief as there have been no major developments to address as clamer markets seem to have prevailed for now. However, Japan’s stock market is getting…
April 15, 2023 -
Japan’s stock market unlikely to be supported by coming corporate earnings season
We have little doubt that credit contraction we are seeing, since start of the banking crisis is leading to slower US economic activity. As far as corporate earnings are concerned, the consensus…
April 8, 2023 -
As US rates look to have peaked, Japan rates need to catch up, pushing yen higher
It’s fairly evident that recent US bank failures have been early signs of stress on the system from Fed’s massive U-turn from its ‘transitional inflation” thesis in late 2021. The speed and the…
April 2, 2023 -
Japan’s banks look insulated to current turmoil but yen’s strength could hurt overseas earnings of multinationals
Markets remain in a state of flux as concerns about the health of global banking system persist. These concerns are partly reflected by the surging asset inflows into US money market funds…
March 26, 2023
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