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Japan

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Quarterly Portfolio Outlook: The Vice Tightens Further

Aggressive monetary tightening has always led to recession, although the timing is uncertain. The effects of high interest rates are starting to be felt. Investors should stay risk off and buy government bonds as a safe haven investment with carry.

Global Asset Allocation by Garry Evans
On Disinflation In Japan
The BoJ remains an outlier among global DM central banks. While many of its peers are now debating whether to end their rate tightening cycles, the Japanese central bank has not even started raising interest rates yet. Nevertheless, Tokyo’s CPI report showed…
Daily Insights
Timing The BoJ's Next Move
As expected, the Bank of Japan voted unanimously to keep policy unchanged on Friday. The policy rate remains at -0.1% and the central bank maintains Yield Curve Control (YCC) on 10-year JGB yields. To the extent that the BoJ made an important tweak to its…
Daily Insights
Weaker-Than-Expected Japanese Economic Data
Japanese economic data delivered a negative surprise on Friday. Q2 GDP growth was revised down from 1.5% q/q to 1.2% q/q, below expectations of 1.4% q/q. The downwards revision reflects a 1% q/q decline in business spending (down from the preliminary…
Daily Insights
Monthly Portfolio Update: Recession Postponed – But Not Avoided

A global recession continues to be likely over the next 12 months. The impact of tighter monetary policy is slowly being felt. Government bonds look increasingly attractive as a safe haven.

Global Asset Allocation by Garry Evans
Tokyo Headline CPI Inflation Dips Below 3%
Tokyo’s headline CPI inflation fell below expectations in August, easing from 3.2% y/y to 2.9% y/y – slightly below anticipations of 3.0% y/y and the first dip below 3% in nearly one year. Similarly, the slowdown in the ex-fresh food measure from 3.0% y/y to…
Daily Insights
Evaluating The Pros & Cons Of Inflation-Linked Bonds

In this report, we assess the best opportunities in inflation-linked bonds in the major developed economies, based on trends in growth, inflation and the stance of monetary policies in each country. We conclude that the environment is turning more challenging for European inflation-linked bond performance versus nominal government bonds, while the opposite is true in Japan. In the US, US TIPS breakevens have likely peaked, particularly at the short end.

Global Fixed Income Strategy
Sell EUR/JPY
Earlier this week, EUR/JPY closed at a fresh 15-year high, bringing its year-to-date gain to 14%, before losing some ground over the subsequent two days. To the extent that the recent increase in global bond yields continues to encourage carry trades, it has…
Daily Insights
August PMI Data Supports European Bond Outperformance Vs. USTs & JGBs
August PMI Data Supports European Bond Outperformance Vs. USTs & JGBs …
Daily Insights
The Inflation Genie In Japan
According to BCA Research’s Foreign Exchange Strategy and Global Investment Strategy services, most indications of Japanese inflation are pointing to upside surprises. This will boost interest-rate differentials in favor of the yen. Core-core CPI came…
Daily Insights

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