Japan’s economy is highly dependent on the health of the global industrial cycle and global trade because a large proportion of Japan’s gross value added and employment still resides in the manufacturing sector.…
Highlights Global Bond Yields: The growing divide between falling negative real bond yields and rising inflation expectations in the US and other major developed economies may be a sign of investors pricing in slower long-run potential…
Japan’s large share of GDP dedicated to manufacturing in general, and automobile production in particular, continues to represent a handicap to this economy for now. In June, Japan’s exports fell 26.2%, despite a…
Highlights Butterflies & Yield Curve Models: With bond market volatility now back to the subdued levels seen prior to the COVID-19 market turbulence earlier in 2020, it is a good time to update our global yield curve valuation…
Highlights Our intermediate-term timing models suggest the US dollar is broadly overvalued. We are maintaining a modest procyclical currency stance (long NOK, GBP and SEK), but also have a portfolio hedge (short USD/JPY). Go…
Highlights The cyclical rally in stocks is not over, but the S&P 500 will churn between 2800 and 3200 this summer. Supportive policy, robust household balance sheets and budding economic growth have put a floor under global…
BCA Research's Foreign Exchange Strategy service believes that the JPY offers a “heads I win, tails I do not lose too much” opportunity. Real interest rates are already higher in Japan than in the US. As such,…
Highlights Historically, when global growth picks up, the yen weakens. But this is less likely in an environment where global yields remain anchored at low levels. Meanwhile, there is rising risk that consumption in Japan will remain…