Japan
Given the meetings between the Bank of Japan, the Bank of England, and the Swiss National Bank, our highest convictions views are:
Overweight UK Gilts. It is also time to sell sterling. We are short sterling, as of 1.30.
Underweight JGBs. Correspondingly, be long the yen.
A short CHF/JPY position remains a core holding. Selling GBP/JPY is also a great trade.
The Trump slump is nearing a temporary reprieve, with a playable countertrend rally in stocks and a tactical rebound in the dollar. Go tactically long USD/SEK. For long-term investors though, the AI bubble still has a lot of air to come out.
In today’s Strategy Insight, we discuss the monetary policy outlook for the Bank of Japan, following the 25-bps rate hike overnight, and what it means for JGBs and the yen.
