2025 Key Views Update: Japan Remains An Underestimated Risk

10 Jul 2025

by Dhaval Joshi, Chief Strategist

Upward pressure on Japan’s real bond yield justifies overweighting the yen and underweighting overvalued tech. Plus: two new tactical trades are long JPY/EUR and short platinum.

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BCA Research | Counterpoint

A global macro strategy which uniquely synthesizes macroeconomics with psychology, behavioural finance, non-linear systems, complexity, and fractal analysis.

Contents

Executive Summary
1. Japan Is The Main Driver Of Global Liquidity, So The Biggest Risk Is A Rising Japanese Real Yield
2. Trump’s US Economy Will Be Supply-Constrained, Keeping US Unemployment Contained And US Inflation Stubborn
3. China’s Fiscal Stimulus Has Lost Its Mojo, So Chinese Bond Yields Must Fall Further
4. Markets Will Reach Points Of Fragility, And Here’s How To Spot Them
Indicators To Watch - Bond Yields
Indicators To Watch - Interest Rates