The Bank of Japan kept the policy rate at -0.1% at its Friday meeting, opting instead to tweak policy and signal that it may not be done with the current easing cycle. The announcement the BoJ would subsidize bank profits to…
Highlights Global Duration: Markets are correctly interpreting the $1.9 trillion US fiscal stimulus package as a factor justifying higher global growth expectations and bond yields. Maintain a below-benchmark stance on overall global…
Japanese machine tool orders are sending a positive message about the global manufacturing recovery. Total orders jumped 36.7% y/y in February from 9.7% y/y in the prior month. True, the surge in Japanese tool orders is…
BCA Research’s Foreign Exchange Strategy service concludes that the yen’s decline amid the dollar rally is washing out stale longs. This process will allow for the USD/JPY to depreciate further. The yen has been…
Dear client, In addition to this week’s abbreviated report, we are also sending you a Special Report on currency hedging, authored by my colleague Xiaoli Tang. Xiaoli’s previous work mapped out a dynamic hedging strategy for…
Highlights Rising Global Yields: The increased turbulence in global bond markets is part of the adjustment process to a more positive outlook for global economic growth. Rising real yields are now the main driver of nominal yield…
Highlights Market-based geopolitical analysis is about identifying upside as well as downside risk. So far this year upside risks include vaccine efficacy, coordinated monetary and fiscal stimulus, China’s avoidance of over-…
Japan’s GDP surprised to the upside in Q4, despite a slowdown compared to Q3. Economic activity increased 3% on a quarter-on-quarter basis, easing from a 5.3% q/q increase in Q3, but beating expectations of a 2.4% q/q print…
2021 has not been easy on the Japanese yen. USD/JPY bottomed on January 5, reflecting underwhelming dynamics in Japan’s domestic economy. The manufacturing PMI which was contracting for all of 2020, finally reached the 50…