Since the ECB announced its open ended QE program we have seen numerous parallels being drawn with Japan’s amped-up QE program announced in April of 2013, but telegraphed in late 2012. One of those parallels is that like Japanese financial stocks, Europe’s financial stocks should...
Today saw another weak package of weak economic data out of Japan. Some highlights were industrial production turning negative year-on-year, real personal income and consumption expenditure posting another round of deep year-on-year declines, and housing starts which continued to plummet year-on-year....
Global stock investors have continued to purchase Japanese shares despite the relatively lackluster economic statistics coming out of the world’s third largest economy....
Japan’s leading indicator posted a modest gain in June but remains well below the highs set back in January of this year (chart 1). Interestingly though, it’s the less followed coincident indicator that gives us pause....
In what may be the most underreported financial event of the year, Japanese government bond yields just keep falling, and falling and falling. As unbelievable as it sounds, yields have fallen by 20bps, or 27.4%, since the beginning of the year to just 52bps currently....
Whether front running more easing by the BOJ or taking bets on deep valued Japanese stocks, foreign investors are starting to accumulate Japanese equities once again. The first chart below shows the 12-week moving average of foreign stock investment in Japanese equities and the trend...
A lot has been written recently by us and others about the absolute collapse in volatility in financial markets. Whether stocks, bonds, FX or commodities, volatility is making multi-year lows, but the lack of volatility in the JPY/USD cross is among the most stunning of...
The recent sales tax increase in Japan is wreaking havoc with price statistics, making year-over-year comparisons basically useless. To address this problem we have begun to make a very simple adjustment to the published price stats which is to subtract the impact of the tax...
For 15 months, between March 2013-June 2014, foreign investors were net sellers of Japanese equities. It seems, however, the tide has turned. Over the last few weeks foreign investors have started accumulating Japanese shares (first chart below). For those invested in Japan this is a...
It is a widely accepted view that Japan’s economy will contract in Q2 and today’s data almost ensures that. This is due to the sequential fall in consumer spending as a result of demand being brought forward into Q1 to avoid higher consumption taxes....
Japan’s GDP grew at a 5.9% annualized rate in Q1, beating expectations for growth of 4.2% and bringing hope that Japan will be able to avoid a tax-increase-induced slowdown in Q2 and beyond (1st chart)....
Last week we analyzed here one reason why the yen has not fallen more, despite all the QE and investor expectations for a much weaker yen....
The Japanese leading indicator for March (which is ironically released 40 days after month end) dropped to the lowest level in a year today (first chart). We understand that this is ”old” data that was simply predicting a slowdown from the sales tax increase in...
After undergoing a fairly rapid depreciation from the end of 2012 to mid-2013 the yen has traded in a more or less sideways channel and has recently been parked between 101-104 per USD....
With Japanese equities having horribly underperformed of late (only 25% of Japanese stocks have outperformed the MSCI World Index YTD), we might be seeing the signs of some early bottom feeding by foreign investors (first table below)....
