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Q1. The Japanese yen fell as expectations about a rate hike decreased.
Resilient labor market data in the US this week has dented expectations that the US will lower interest rates early in 2024 and narrowed the interest rate differential between the US and Japan. The yen has been trading in a boxed range for about a month as investors assess how fast BOJ can implement a rate hike. Ahead of the U.S. inflation report, the Japanese market surged but we are not sure if this rally will turn into a longer trend just yet. We should keep monitoring job data and inflation data to assess BOJ action which will have a significant impact on the stock price.
Q2. Nikkei 225 sets new record levels, highest since 1990
There is some optimism that the Japanese market is re-rating after a lackluster performance for more than a decade. There is a point in this, but such a claim is not backed by enough macro data yet. Geopolitical tension and surprising inflation data can easily take the rally off the rail. So, we are cautiously optimistic.
Q3. Stocks react in South Korea after the central bank's decision to stabilize interest rates.
Ahead of December's U.S. inflation report, Japan's market surged but South Korea's stocks held onto gains following the Bank of Korea's interest rate holding.
Unlike Japan, KOPIS ended in negative despite what seemed like a good start in the morning. There are some concerns regarding Fed’s action ahead of the release of CPI data. Depending on the outcome, the market will head into a very different path. Interestingly, stocks related to the crypto currencies staged a good rally due to anticipation that the launch of the Bitcoin ETF will bring a positive inflow.
Q4. Do you think BOJ prefers stronger Yen or weaker Yen.
I think BOJ prefers a stronger Yen after the currency has lost too much ground last year. The depreciation of currency is now feeding into the real market and affecting how much people are paying in the market. Also, we saw some mixed bag of data from inflation and the job market. BOJ will prudently assess more incoming data before making a decisive action.
Post | Feed | LinkedIn
https://www.linkedin.com/feed/update/urn:li:activity:7151524620574015488/?originTrackingId=ONRlz7%2FzQlGyWncLUVa9Zw%3D%3D
Q1. The Japanese yen fell as expectations about a rate hike decreased.
Resilient labor market data in the US this week has dented expectations that the US will lower interest rates early in 2024 and narrowed the interest rate differential between the US and Japan. The yen has been trading in a boxed range for about a month as investors assess how fast BOJ can implement a rate hike. Ahead of the U.S. inflation report, the Japanese market surged but we are not sure if this rally will turn into a longer trend just yet. We should keep monitoring job data and inflation data to assess BOJ action which will have a significant impact on the stock price.
Q2. Nikkei 225 sets new record levels, highest since 1990
There is some optimism that the Japanese market is re-rating after a lackluster performance for more than a decade. There is a point in this, but such a claim is not backed by enough macro data yet. Geopolitical tension and surprising inflation data can easily take the rally off the rail. So, we are cautiously optimistic.
Q3. Stocks react in South Korea after the central bank's decision to stabilize interest rates.
Ahead of December's U.S. inflation report, Japan's market surged but South Korea's stocks held onto gains following the Bank of Korea's interest rate holding.
Unlike Japan, KOPIS ended in negative despite what seemed like a good start in the morning. There are some concerns regarding Fed’s action ahead of the release of CPI data. Depending on the outcome, the market will head into a very different path. Interestingly, stocks related to the crypto currencies staged a good rally due to anticipation that the launch of the Bitcoin ETF will bring a positive inflow.
Q4. Do you think BOJ prefers stronger Yen or weaker Yen.
I think BOJ prefers a stronger Yen after the currency has lost too much ground last year. The depreciation of currency is now feeding into the real market and affecting how much people are paying in the market. Also, we saw some mixed bag of data from inflation and the job market. BOJ will prudently assess more incoming data before making a decisive action.