Financial Times (June 30)
“The UK’s decision to leave the EU will not have any immediate, direct negative consequences for the ratings of states and major banks across Asia Pacific,” according to Fitch Ratings who also warned that “Japan could prove the exception…given the yen’s haven status and resultant strengthening posing a risk to policymakers’ planning.”
Tags: APAC, Banks, Brexit, Consequences, EU, Fitch, Haven Risk, Japan, Negative, Ratings, Sovereigns, UK, Yen
Bloomberg (June 20)
“Brexit stresses are seeping into virtually every corner of the global foreign-exchange market. Of 16 major currencies tracked by Bloomberg, all but three have seen a jump in the cost to hedge against big declines.” The Japanese yen Brazilian real and Swiss frank are the three exceptions.
Tags: Brazil, Brexit, Cost, Currencies, Declines, Forex, Hedge, Japan, Markets, Real, Switzerland, Yen
Bloomberg (April 11)
“For global equity investors and Shinzo Abe, it’s splitsville.” For 13 straight weeks during 2016, “foreign traders have been pulling out of Tokyo’s stock market.” They’ve dumped “$46 billion of shares as economic reports deteriorated, stimulus from the Bank of Japan backfired and the yen’s surge pressured exporters. The benchmark Topix index is down 18 percent in 2016, the world’s steepest declines behind Italy.”
Tags: Abe, BOJ, Equity investors, Exporters, Italy, Shares, Stock market, Tokyo, Topix, Traders, Yen
Bloomberg (February 12)
The Bank of Japan’s “decision to adopt negative interest rates has failed to rein in the currency’s advance.” In part, this is because money managers are advising wealthy families to favor the yen amid the turmoil in global financial markets. As a result, the yen is outperforming “all 31 other major currencies this year as Japan’s current-account surplus makes it attractive for investors seeking a haven.
Tags: Attractive, BOJ, Currency, Current-account, Haven, Interest rates, Investors, Japan, Money managers, Outperforming, Turmoil, Wealthy, Yen
The Economist (January 9)
“Japan is the best example” of how currency devaluations no longer seem to provide economies with much of a boost. “The yen has been depreciating rapidly. A Big Mac was 20% cheaper in Japan than in America in 2013; now it is 37% cheaper. Yet export volumes have barely budged…. This is a surprise: the IMF calculates that Japanese exports are around 20% lower than it would have expected, given how the yen has weakened.”
Tags: Big Mac, Boost, Currency devaluation, Depreciating, Export volumes, IMF, Japan, U.S., Yen
Bloomberg (January 4)
“For the first year since 1989, foreigners sold Japanese stocks and missed a rally.” The TOPIX index gained 8.9% in dollars and 21% in euros, but overseas investors missed out on some gains by offloading more than 250 billion yen in Japanese shares last year. “The Topix capped a 9.9 percent gain in local-currency terms last year, its fourth straight annual increase. Combined with the yen’s resilience, that meant that the Topix outperformed the Standard & Poor’s 500 Index in dollars for the first time since 2008” and its “gain in euros was triple that of the Stoxx Europe 600 Index.”
Tags: 1989, Dollars, Euros, Foreigners, Gains, Increase, Japan, Offloading, Rally, S&P 500, Stocks, Stoxx Europe 600, Topix, Yen
Bloomberg (December 1)
Not everyone is in line with the consensus view that the yen will weaken to 126 per dollar by the end of 2016. Among the most bullish, Morgan Stanley “expects Japan’s currency to strengthen to 115 against the greenback.” Factors behind this forecast include the historic weakness of the yen, the need for Japanese pension funds to repatriate money, improvement in Japan’s economy and a general overestimation of the BOJ’s commitment to monetary easing.
Tags: Bullish, Consensus view, Dollar, Economy, Japan, Monetary easing, Morgan Stanley, Pension funds, Yen
Bloomberg (August 13)
“China’s devaluation becomes Japan’s problem.” The surprise action raises the question of “what China’s move means more broadly for Abenomics. A sharply devalued yen, after all, is the core of Prime Minister Shinzo Abe’s gambit to end Japan’s 25-year funk.” But China’s move is not necessarily the death knell of Abenomics, which has been sputtering. “China’s move may catalyze Abe to act. By undercutting Japan’s devaluation, China might increase Abe’s urgency to boost competiveness, innovation and wages.”
Tags: Abe, Abenomics, China, Competiveness, Devaluation, Innovation, Japan, Sputtering, Wages, Yen
Wall Street Journal (January 7)
“As notable as the magnitude of the greenback’s rise has been its rapidity: 13% against the euro and some 15% against the yen since the end of June. Capital that had flowed into emerging markets since the world financial panic is now heading back to the land of the free,” boosting the economic strength of the U.S.”
Tags: Capital, Economic strength, Emerging markets, euro, Financial panic, Greenback, Magnitude, U.S., Yen
Financial Times (June 9)
For the first time in over four decades, Japan earned more in tourism than it spent. This last happened in 1970 when “the Apollo moon landing was still fresh in the memory, Osaka was hosting Asia’s first World’s Fair and a dollar bought three-and-a-half-times more yen than it does today.” Visitors from Asia have skyrocketed as destinations in Japan have gone from “prohibitively expensive” to reasonable, aided by the drop in the yen and higher disposable incomes elsewhere in Asia.
Tags: Apollo, Asia, Destinations, Dollar, Incomes, Japan, Osaka, Prohibitive, Reasonable, Tourism, Visitors, World’s Fair, Yen
