Japan
The JPY’s decline reflects rising inflation expectations rather than fiscal risk, and is likely to persist until the BoJ turns more hawkish. Our Chart Of The Week comes from Mathieu Savary, Chief FICC Strategist. Mathieu examines the JPY’s decoupling from…
A more aggressive BoJ hiking stance is needed to stabilize the JPY. Recent price action has fueled speculation that Japanese officials now see yen weakness as an inflation risk, and that the BoJ may be open to accelerate the pace of hiking. Verbal…
USD/JPY has reached its highest level since 1986, and markets are increasingly pricing the risk that the BoJ stays behind the curve. Verbal intervention from the BoJ and the US Treasury has so far proved ineffective. The recent bear steepening of the JGB…
The equity bull market is getting long in the tooth. Bonds should perform well once economic growth begins to slow. The dollar will strengthen over the coming months before resuming its downtrend. While crude has likely found a near-term floor, we favor metals over energy in the long run.
The June Tokyo CPI came in hotter than consensus, pointing to rising price pressures and further policy tightening. The headline index rose to 1.7% y/y from 1.4%. Core measures were also hot, with CPI ex-fresh food rising to 1.6% from 1.3%, and “core core”…
The dollar has had a strong run but its key supports from Fed repricing, positioning, and terms of trade are starting to fade. We close our tactical long USD positions and turn to short USD/JPY, where intervention risk makes yen shorts look increasingly dangerous.
Japan’s export outlook remains favorable, but domestic weakness warrants tactical caution on equities. A sharp decline in the real effective exchange rate and continued growth in AI infrastructure spending are supporting exports. Japan’s share of exports to…
In this screener report, we explore opportunities in Japanese Non-TMT equities, El Niño hedges, and US consumer-facing equities.
The Bank of Japan raised rates to their highest since 1995, but market pricing still understates the tightening path. The BoJ hiked 25 bps to 1%, as expected, in a 7-1 decision. This marks another step in Japan’s exit from its structurally deflationary…
Japan’s May Eco Watchers Survey beat estimates, pointing to resilient growth despite the Middle East conflict. Both the current conditions and outlook indexes rose more than expected, to 43.6 from 40.8 and to 40.7 from 39.4, respectively. Both had plunged in…