Emerging market investors uneasy? Fed rate cuts could cause yen appreciation.
The Fed's possible interest rate cut this week may lead to a strengthening of the Japanese yen, which could unsettle emerging market investors and bring back memories of the global turmoil in August.
Nikkei Falls 0.7% as Yen Hits Close to a Nine-Month High
The yen trend has reversed, and Japanese stock investors are daring to go without hedging.
Since the Bank of Japan raised interest rates in July, there has been a more widespread change in people's views on the yen. This is a double-edged sword for the stock market.
After the release of the two big data, the Bank of Japan's expectations of interest rate hikes have increased.
After the release of Japan's labor cash income data and the US non-farm data, the Japan 225 index CME futures once again fell by more than 5%.
Whales are changing direction! The world's largest retirement fund may increase its holdings of Japanese stocks, triggering a chain reaction.
One of the world's largest retirement funds, the Government Pension Investment Fund (GPIF) of Japan, may increase its buying of domestic stocks and reduce investments in foreign bonds. This trend could have an impact on the global market. As long as GPIF raises its allocation target for Japanese stocks by 5 percentage points, it could translate into a net purchase of over 10 trillion yen (approximately 69 billion US dollars).
The Governor of the Bank of Japan reiterated that the economic environment remains accommodative and if the data meets expectations, interest rates will continue to be raised.
Kazuo Ueda stated that due to the significantly negative real interest rates, the economic environment will remain loose even after the interest rate hike in July.
Analysts warn of the risk of Japan raising interest rates: August "Black Monday" is just a preview of a bigger disaster.
①Arif Husain, the head of the fixed income department at PIMCO, warned that the 'Black Monday' in August was just the initial stage of this disaster, and there will be more market volatility in the future; ②He believes that the tightening of monetary policy by the Bank of Japan and its impact on global capital flows is not straightforward, and it will have a huge impact in the coming years.
Resona's subsidiary, AM-One, launched a fund focused on large cap stocks in Japan, raising $3.4 billion to bet on the recovery of the Japanese stock market.
Mizuho Financial Group's asset management company AM-One plans to launch an active fund focused on large-cap stocks in Japan before the end of the year.
BlackRock Sees a Slowdown in the Overall U.S. Economy and Not a Recession
Express News | Survey: Nikkei/Yen index expected to reach a historical new high by the end of next year, with the possibility of regaining the 40,000-point mark by the end of this year.
Bank of Japan sends a strong signal, is there still a reason to raise interest rates? The Japanese yen recovered strongly.
On August 20th, two new research reports released by the Bank of Japan warned that the persistent inflationary pressure in Japan's economy indicates that the bank still has reason to raise interest rates again.
Some large institutions still bet on Japan's further interest rate hikes by heavily shorting Japanese government bonds and over-allocating to the yen.
These institutions' positions are inconsistent with the pricing of the overnight swap market.
The Japanese stock market has returned to a bull market at lightning speed, with unprecedented buying from foreign investors.
The Nikkei skyrocketed, returning to the bull market, with the largest increase since April 2020. After foreign investors sold off Japanese stocks like crazy, they are now pouring in unprecedentedly!
Express News | Strategists suggest that Fumio Kishida's resignation clears the way for the Bank of Japan to raise interest rates.
Weekly preview: Market focuses on USA's CPI in July! Chinese concept stock financial reports will be released intensively, Tencent and Alibaba taking turns to take the stage.
On August 15th, the National Bureau of Statistics will release macro data such as industrial added value and total retail sales of consumer goods for July. In addition, financial data such as new loans, M2, and total social financing scale will also be released.
JPMorgan and UBS Group both lowered their target price for Japanese stocks, will the yen continue to rise?
Is the rebound temporary? JPMorgan and UBS Group are not bullish on Japan's stock market's prospects this year, believing that the closing of yen carry trades is not yet over. The Bank of New York Mellon boldly predicts that the yen against the US dollar could rise to 100.
JPMorgan Asset Management: Japan's central bank will have to look at the U.S. economy's "face" again for another interest rate hike.
JPMorgan Asset Management has stated that the Bank of Japan will avoid raising interest rates again in the short term, and further tightening of policy may depend on the fate of the US economy.
The replay of the Bank of Japan meeting that triggered a global crash: The Bank of Japan does not believe that a 15 basis point interest rate hike is contractionary.
The summary of the opinions of the Bank of Japan's July 31st meeting, released on Thursday, showed that Bank of Japan officials expect monetary policy to remain loose and do not believe that even if they raise interest rates, it would be enough to disrupt the global market.
The Bank of Japan's dovishness appeased the market, but the Japanese stock market plummeted rapidly at the end of the trading day. Is the global market still in turmoil?
As Japan's stock market approached closing time, a sudden plunge once again took place. The nikkei 225 index, which had originally risen by more than 3%, quickly fell during the closing period, closing up only slightly over 1%. The South Korean stock index also followed Japan's departure from its high level and fell slightly.
Just now, the Bank of Japan surrendered by "dovish" policy.
Under strong selling pressure, the Bank of Japan has turned dovish again, and arbitrage trading has resumed, and the yen may return to the situation of being heavily shorted. Some commentaries predict that malignant inflation will return as the Bank of Japan continues to maintain a cautious stance, and the yen exchange rate will hit new lows in the "near future".