Japan
Our Global Investment strategists highlighted back in November 2022 that structural deflationary forces in Japan were weakening, thus setting the stage for inflation to make a historic comeback in Japan. About a year later, they highlighted that 2024…
In this Special Report we assess the absolute and relative attractiveness of developed market government bonds using several fair value models. Longer-term investors who are focused on value should overweight US long-maturity bonds, and favor Spanish, Australian, and potentially UK government bonds within a DM ex-US allocation.
The Bank of Japan’s Economy Watchers Survey – a gauge of sentiment among business owners – disappointed in April. The Current Conditions and the Outlook indices deteriorated from 49.8 to 47.4 (20-month low) and from 51.2 to 48.5 (16-month low), below…
In this week’s report, we defend four out-of-consensus claims. Claim #1: Underlying inflation in the US is not reaccelerating. Claim #2: The US labor market is set to weaken abruptly. Claim #3: The S&P 500 will drop to 3700 in 2025. Claim #4: Japan is not in danger of a currency crisis.
The Tokyo inflation release for April came in on the soft side on Friday, with every single metric coming in below expectations. Tokyo headline inflation declined from 2.6% y/y to 1.8% y/y, versus expectations of a much more muted decline to 2.5% y/y.…
USD/JPY has appreciated by over 10% so far in 2024, making the yen the worst performing G10 currency year-to-date. This cross has also surpassed the 150 threshold which historically is the level at which the Bank of Japan begins to intervene. Today, it stands…
Japan’s national CPI inflation unexpectedly cooled in March, falling to 2.7% y/y versus consensus estimates it would remain at 2.8% y/y. Notably, measures of underlying inflation such as core CPI (ex-fresh food) and “core-core” CPI (ex-fresh food and energy)…
The total return of a carry strategy that is long high-yielding currencies like the Brazilian real and the South African rand and short a funding currency like the Japanese yen is pointing to a recovery in global growth. Carry trades distribute liquidity…
US, European and Japanese small caps have underperformed their large cap counterparts by 22.6%, 15.3% and 10.1% respectively since 2021. They now face conflicting forces. On the one hand, they are extremely beaten down and cheap, potentially offering a good…
The extraordinary performance of AI companies has pushed US growth stocks to new highs. So far, the MSCI US Growth Index has returned almost 11% since the start of the year, outperforming global stocks by over 3%. No growth index from the rest of the world…