Japan
The Bank of Japan held rates but kept the door open to further hikes despite energy shock uncertainty. The policy rate was left at 0.75%, with Governor Ueda signaling that a temporary energy shock should not derail the underlying upward inflation trend. As…
Interest rate volatility is very low across developed market fixed income. Investors should maximize the carry in their portfolios to outperform in a low rate vol environment.
February flash PMIs edged higher, pointing to gradual improvement in global growth. After moving mostly sideways through 2025, developed markets PMIs are picking up. Manufacturing is showing decent momentum, rebounding after being weighed down by trade…
Japanese stocks’ bull market has many more years to run, and it will extend to the JPY. The TOPIX’s negative correlation with the yen should thus fade, and a stronger JPY may increasingly coincide with rising Japanese equities. Investors often treat Japan as…
For this screener report, we explore opportunities in laggards with earnings momentum, Japanese semiconductors and US rate-sensitive stocks.
We spent last week meeting investors in Switzerland. This Strategy Insight revisits the most prominent topics we discussed, including repatriation fears, SNB intervention, and Dutch pension reform.
Japanese Q4 GDP disappointed, but early indicators point to a reacceleration. GDP rose 0.1% q/q (0.2% annualized) after falling 0.7% q/q in Q3. Private sector activity was weak but positive, with consumption rising 0.1% and business spending 0.2%, while…
Our EM strategists see a poor risk-reward profile for the yen carry trade, though timing its reversal remains challenging. They argue that once the yen begins to appreciate, the move is likely to prove outsized given the scale of the existing carry trade. The…
The yen carry trade will unwind this year. However, it will be triggered by a drop in “carry asset” prices and a spike in the JPY/USD, rather than by Japan’s improving interest rate differentials. Go long JPY against the USD.
Japan’s election delivered a decisive mandate for PM Takaichi, reshaping domestic politics. The landslide victory, the LDP’s largest in the post-war era, secures a supermajority in the lower house and reverses losses from the 2024-25 elections. The scale of…