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Japan

The Apex Of EUR/JPY?
The strength in the euro versus the yen since May 2020 can be divided into two phases. During the first phase, from May 2020 to June 2021, the ebbing of the worst of the pandemic and the re-opening of the global economy boosted the pro-cyclical euro relative…
Daily Insights
How Low Can The Japanese Inflation Drop?
Last week’s Tokyo CPI release showed the first signs of modest disinflationary pressures in the Japanese economy. Headline inflation fell from 4.4% to 3.4%, in February. The ex-fresh food component also fell. That said, the core measure, that strips out both…
Daily Insights
Monthly Portfolio Update: This Isn’t Going To End Well

The rebound in growth is pushing up inflation. More aggressive monetary policy is likely to trigger recession over the next 12 months or so. Investors should stay defensive.

Global Asset Allocation by Garry Evans
Short Euro/Yen
A lot of ink has been spilled of late on the Bank of Japan’s incoming governor and the impact this will have on the central’s bank Yield Curve Control (YCC) policy. Japanese inflation has been climbing steadily – national and Tokyo, headline and core measures…
Daily Insights
Russo-Chinese Axis (A GeoRisk Update)

Great Power Rivalry is taking another leg up as Russia and China further align their geopolitical interests. Investors should stay long USD-CNY, favor defensives over cyclicals, and markets like North America and DM Europe that have less exposure to geopolitical risk. 

Geopolitical Strategy by Yushu Ma, Matt Gertken, Jesse Anak Kuri, Guy Russell
What Could Replace YCC in Japan?
Since the start of the year, the Bank of Japan (BOJ) has bought JPY22 trillion of JGBs, equal to 4% of GDP. Early this week it was forced to conduct further emergency bond buying to keep the yield on 10-yield JGBs below its target of 50 BPs. With new…
Daily Insights
Rising Risk Of A Second Inflation Wave

The risk of a recession in 2023 is being supplanted by the risk of another inflation wave. We will turn more defensive on equities if it continues to look like inflation is making a comeback.

Global Investment Strategy by Peter Berezin
Positive Economic Data Surprises From Japan
Japan’s Economy Watchers Survey – which is based on responses from over 2,000 workers from a variety of sectors that are sensitive to domestic economic conditions – suggests that businesses are becoming less pessimistic about the economic outlook. Although…
Daily Insights
Month In Review: Three Major Central Banks Jawbone The Dollar

This week, we articulate what the actions of the three major central banks that met (Fed, ECB and BoE) mean for currency markets. This is within the context of our analysis of the latest data releases in the G10, that allows us to calibrate currency strategy.

Foreign Exchange Strategy by Chester Ntonifor
Monthly Portfolio Update: The Key Question For The Fed

When does rising unemployment become a bigger problem than inflation? The Fed won't cut rates until that happens, probably thwarting market hopes of big cuts in 2H.

Global Asset Allocation by Garry Evans

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