Japan
The Bank of Japan kept its policy rate unchanged at 0.25% in September and signaled it was in no rush to lift rates further. This move follows two hikes this year, one of them unanticipated. The signaling is consistent with dovish comments in August…
The Bank of Japan’s policy normalization has been accompanied by exceptional outperformance by Japanese banks. Japanese banks have outperformed both the country’s broader market as well as the MSCI ACW Banks index by 10.3% and 2.6%, respectively, so far this…
According to BCA Research’s Foreign Exchange Strategy and Global Investment Strategy services, most carry investors have covered their positions. Away from day-to-day noise, the longer-term trajectory of yen exchange rates will be driven by fundamentals. …
In this report, we argue that the Bank of Japan is unlikely to hike interest rates this week, but the relative trajectory of bond yields in Japan is higher. This warrants an underweight position in JGBs and a leveraged bet on a higher yen. The positioning for equity investors is murkier, as progress on corporate reforms is necessary for a rerating in Japanese shares. That is not yet very clear. The bottom line is: Stay long the yen.
Volkswagen’s CEO has been making the point that the market for European carmakers has been deteriorating. Earlier last week, he went on to make a rather pointed reference at Chinese EV manufacturers. He was quoted saying that, "The pie has become…
Global semiconductor stocks have returned 50% YTD in USD terms, and a whopping 200% since their September 2022 lows. However, they may have peaked back in July. Our Emerging Market strategists highlight a significant bifurcation between the revenues of…
Many currencies have registered sizable gains against the US dollar over the last two months. Most notably, the yen has been one of the best G7 performers since the greenback began depreciating. It now trades at 143 against the US dollar, marking a 11% gain…
Tokyo’s CPI is a timely leading indicator of nationwide price pressures. In August, the headline, core (ex-food) and the “core core” (ex-food and energy) measures all accelerated by larger-than-expected margins, reaching 2.6%, 2.4% and 1.6% y/y, respectively.…
Preliminary estimates suggest that with the exception of the UK (see Country Focus), manufacturing activity remains lackluster in DM economies. Manufacturing declined at a slower pace in Japan and Australia but the contractions unexpectedly accelerated in the…
Singapore is a small open economy sensitive to global trade dynamics. Its non-oil exports (NODX) are thus a good bellwether for global growth conditions. They rebounded sharply in July from a previous contraction, largely exceeding expectations. Notably,…