In the Mundell-Fleming model, tight fiscal policy often leads to a lower exchange rate because it causes monetary authorities to maintain more accommodative monetary conditions than would have been the case absent any budget…
The liabilities of the Japanese nonfinancial corporate sector stand at an elevated 190% of GDP. Debt, specifically, stands at 104% of GDP. This debt load is more elevated than in Germany, the US or the UK (60% of GDP, 75% of GDP…
The Japanese economy continues to show signs of recovery. The final estimate of the Industrial production annual growth for July came in at -15.5%. While still an extremely weak number, this is a significant pick up from the…
According to BCA Research's Foreign Exchange Strategy service, the yen remains an attractive portfolio hedge. This view rests on three pillars. First, Japan has one of the highest real rates in the G10, meaning outflows from…
To all clients, Next week, in lieu of publishing a regular report, I will be hosting a webcast on September 15th at 10 am EDT, discussing our latest views on global fixed income markets. Sign up details for the Webcast will…
Highlights Stocks, particularly tech stocks, are technically overbought and highly vulnerable to a further correction. Nevertheless, investors should continue to overweight global equities relative to bonds on a 12-month horizon, while…
According to BCA Research’s Geopolitical Strategy service, Abenomics will remain Japan’s economic policy, even if a dark horse candidate wins the Liberal Democratic Party’s leadership race. The major failure…
Highlights The dollar has entered a structural bear market but is at risk of a countertrend bounce. The catalyst for such a bounce will be the underperformance of G10 economies, specifically the euro area relative to the US.…
Highlights Abenomics was working – prior to trade war and COVID-19 – and it will remain Japan’s economic policy setting, albeit in a new guise. This is true even if a dark horse candidate wins the Liberal Democratic…
Warren Buffett has deployed capital in Japanese trading companies to much fanfare. He has bought 5% stakes in ITOCHU corp., Marubeni Corp, Mitsui & Co. Ltd, Sumimoto Corp and Mitsubishi Corp. It is questionable that this is a…