Japan

The Bank of Japan pulled its policy rate out of negative territory with a 10-basis point rate hike on Tuesday that brings the BoJ’s overnight interest rate to a range of 0% to 0.1%, ending over a decade of ultra-accommodate monetary policy. The central bank…

2 years ago

Essentials

Japan: Q4 GDP Expansion Raises Odds Of BoJ Hike

Japanese equities and government bonds sold off on Monday and the yen strengthened following the release of the revised Q4 GDP report showing the economy expanded by an annualized 0.4% q/q in Q4 2023 versus earlier estimates of a 0.4% contraction. A…

2 years ago

Portfolio

Monthly Portfolio Update: Recession Thesis Remains Intact

Amid patchy global growth, the US economy remains resilient. However, tight monetary policy will eventually trigger a recession in the US too. The stock market rally has been very narrow. Stay underweight risk assets.

2 years ago

Essentials

BoJ: Nearing The End Of Negative Rates?

Japan’s CPI inflation dropped from 2.6% to 2.2% y/y in January. However, the sharp slowdown comes on the back of falling energy prices. Meanwhile, the BoJ’s core-core measure of underlying inflation (CPI excluding fresh food and energy) eased from 3.7% y/y to…

2 years ago

Essentials

Irrational Exuberance?

Nvidia’s blowout Q4 2023 earnings results and bullish guidance catalyzed a rally in global stocks that pushed the S&P 500, Europe’s Stoxx 600, and Japanese Nikkei to record highs on Thursday. The S&P 500 is already expensive. It is true that Big…

2 years ago

Essentials

Japan's Export Surge: Less Than Meets The Eye

Japanese exports in JPY increased by 11.9% y/y in January, up from a 9.7% y/y increase in December and surpassing expectations of 9.5% y/y. A 29.2% y/y jump in exports to China led the overall surge. Trade data from Asian export-oriented economies are…

2 years ago

Essentials

Does The Japanese Equity Rally Have Legs?

Japanese equities have outperformed their global peers since September 2022 in common currency terms. Over this period, the Nikkei 225 and the TOPIX posted gains of close to 50%. A weak yen has boosted Japanese multinationals’ foreign revenues and prompted…

2 years ago

FICC

It’s A Good Time To Buy Inflation Insurance

Could a second wave of global inflation be underway? The latest inflation prints in the US and UK showed upside surprises, while there is evidence of increased price pressures in global manufacturing. Combined with the improvements seen in economic sentiment measures and leading economic indicators in the US and Europe, and potential upside risks to oil prices, we see a strong case for owning more inflation protection in global bond portfolios. Inflation-linked bonds look attractive in this environment, especially in the US.

2 years ago

Bonds

Portfolio

Monthly Portfolio Update: Waiting For The Recession

When will the US also buckle under high rates? We expect a US recession to begin around mid-year. Stay defensive.

2 years ago

CoreMacro

MacroQuant Model Update: The Party Is Winding Down

Following the release of the white paper yesterday, today we are sending you the inaugural issue of the MacroQuant Monthly, a report summarizing the output of our next-generation MacroQuant 2.0 model.

2 years ago

MacroQuant

Japan

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