Japan
Highlights Bond Strategy: The investment backdrop is broadly evolving the way that we forecasted in our 2018 Outlook, thus we continue to maintain our core strategic recommendations. Maintain below-benchmark portfolio duration and overweight global corporate debt versus government bonds (…
Highlights Data based on Bloomberg/Barclays global treasury/aggregate indexes from December 1990 to January 2018 supports the argument that foreign government bonds are not worthy of investing in when unhedged, due to extremely high volatility. On a hedged basis, however, foreign bonds are a…
Highlights Policymakers & Volatility: The major developed market central banks (Fed, ECB, BoJ), facing low unemployment rates and slowly rising inflation, are less able to respond to volatility spikes with more dovish monetary policies compared to past years. Investors should get used to a…
Highlights The political path of least resistance leads to fiscal profligacy - in the U.S. and beyond. The response to populism is underway. The U.S. midterm election is market-relevant. Gridlock between the White House and Congress does, in fact, weigh on equity returns, after controlling for…
Highlights Federal Reserve: Is the U.S. neutral rate now higher? ECB: How much has the euro rally damaged European growth? Bank of Japan: Will a stronger yen tip Japan back into deflation? Bank of England: Will higher real wages offset Brexit uncertainties? Bank of Canada & Reserve Bank…
Highlights The financial landscape has shifted over the past month with the arrival of some inflation 'green shoots' and a major shift in U.S. fiscal policy. Fiscal policy is shaping up to be a major source of demand and a possible headache for the FOMC. Tax cuts and the spending deal will…
Highlights Expectations that the BoJ's yield curve control strategy is toward its tail end, general USD weakness, and brewing EM troubles are conspiring to push the yen higher. Tactically, the yen has more upside. Global financial markets are set to remain volatile and softness in China point…
Highlights Japan Economy & Inflation: Japan is in the midst of a solid cyclical upturn, driven by strong exports and rising investment spending. Yet despite signs that the economy is running at an above-potential pace with no spare capacity in labor or product markets, inflation remains…
Dear Client, Wednesday, we sent you a Special Report by our Global Investment Strategist, Peter Berezin titled: The Return of Vol, which fleshed out BCA's view on the recent volatility spike and the associated market selloff. BCA believes that markets are realizing that U.S. inflation is not…
Highlights Japan's reflationary economic policies will be reinforced ahead of the constitutional referendum; The Bank of Japan is a long way from a 2% inflation overshoot; Fiscal thrust will continue to surprise to the upside; Wage law revisions are significant and, on net, inflationary; Go…