Posts Tagged ‘ abenomics ’

World investors more bullish on Japan than any other country : Abenomics 2 – 0

abe

Investors are more confident in a Japanese leader than any time since at least September 2010, with optimism about Prime Minister Shinzo Abe’s policies exceeding that for counterparts in the U.S., Europe and China.

Japan offers one of the top two opportunities globally in the next year,
according to 33″ of respondents, up from 21% and beating China for
the first time in surveys dating back to 2009. Considering Japan is one of China largest investors that does make sense !

As I mentioned in January Prime Minster Abe is effectively creating his war cabinet on deflation , last piece is the win the up and coming elections .

What Abe has done is creating a change in the Japanese mind set , but also he has also changed the perspective of Japan on the global stage .

May this continue for a long long time .

From a very optimistic Tokyo ,

 

Tony Evans

http://www.bloomberg.com/news/2013-05-16/japan-becomes-most-favored-nation-in-poll-showing-abe-optimism.html

http://redd.it/1ehlku

Yen makes a break for it , further weakness ? You can bet on it

How exciting the ¥ has broken the illusive 100 mark ! First time in 4 years , so what you think ? This is huge , Abenomics is working .

The yen is ready to weaken even further versus the $ looking at my trading patterns . Next key point is 101.69 then 103.32. We are looking know at 104 as the next key figure to break a pattern called a triangle pattern .

I still see the Yen 105/110 at the end of the year

Fibonacci retracement is named after a 12th century Italian mathematician and based on the theory that prices rise or fall by predictable amounts after reaching a high or low. In this and other forms of technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a currency, security or index. Support refers to the lower boundary of a trading range, where buy orders may be clustered.

The Bank of Japan increased monthly bond purchases on April 4 to exceed 7 trillion yen ($696 billion) at BOJ Governor Haruhiko Kuroda’s first policy meeting in charge, exceeding the 5.2 trillion yen forecast by economists! This was a game changer ! The bonds is equal to Turkey GDP!

This is Yen wreaking and $ strengthening , things are looking very positive .

Lets lock and load

Tony Evans

In Millionaire capital of the world Tokyo .

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Nikkei 225 breaches 14,000 – best in almost 5 years

Japan has an air of BOOM brewing , economic that is .
Stock markets are up nearly 50% in one year , yen weakening and improving economic activity , can it last ? I think so when Nikkei starts to go 19,000 /20,000 then it’s time to re think .
We have been focused and bombarded with negative news for past 5 years we believe good news won’t last , for the moment it ill .

It’s here to stay , enjoy the good news , good wether and good return .

Personally i have a view profits are only profits when you bank them .

Tony Evans
Tokyo 8th May

Nikkei 225 breaches 14,000 – best in almost 5 years.

The Japanese Nikkei 225 stock average pushed through 14,000 for the first time since June 2008, after stock markets in Japan reopened from a two-day holiday.

During the closed period for the Golden Week holidays, the yen fell, the European Central Bank cut its benchmark rates and US jobs data beat estimates. Consequently, by the end of the morning session, the Nikkei was up 2.8% to 14,083. Such gains were led by the basic materials and consumer goods sectors, with almost all companies on the index posting rises.

Furthermore, analysts believe that improving corporate earnings could also boost sentiment further in the days ahead.

Of which, Toyota Motor surged 4.4% a day after the Nikkei newspaper said that the operating profit for the year ended March 31 was expected to have tripled from a year earlier. Nissan Motor also jumped 5% ahead of its earnings announcement later this week.

Elsewhere in Asia, the MSCI Asia Pacific index rose 1%, while South Korea’s Kospi Composite index slipped and Australia’s S&P/ASX 200 index retreated – amid caution ahead of the Reserve Bank of Australia’s monetary policy decision.

Australia’s central bank has cut its benchmark interest rate to a record low of 2.75%, in an attempt to counter slowing growth in the country’s mining sector. The bank said that it expects investment in the resources sector, one of its biggest drivers of growth, to peak this year.

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Jim O’Neill Seminar -¥ / Japan / Aussie $ / Brazil Real

Well by sheer charm and standing in Tokyo I was able to get a seat to see a true master of the universe Goldman Sachs Asset Management Chairman Jim O’Neill.

•The Bank of Japan can achieve 2% percent inflation within two years and then may need to concern itself with containing prices if it succeeds .
If they are committed he said then they can ,Haruhiko Kuroda has pledged to do “whatever it takes” to beat deflation and plans to double the monetary base!

Goldman Sachslast week increased the outlook on Japanese Equites , my view has always been whatever Goldman does the market follows .
Outlooks for 2013
•Topix – 1,350
•Nikkei 225-16,000

By 2015 they see
•Topix – 1,600
•Nikkei 225-19,000

YEN- ¥
• He believes the consequences of “Abenomics” would be a $/Yen 105-110, but Y120 could happen faster with the US change not being quite so necessary.

Australia

•it’s overvalued !

“A currency I find the most interesting is the Australian $” O’Neill, &“The Australian dollar is significantly overvalued.”

Reason for this is foreign purchase of government debt .

Brazil Real
• The weak economy means there is no appreciation likely .

•Last week the central bank increased interest rate to control inflation.

Manchester United

Always the die hard fan , he’s looking forward for Manchester United winning their 20th title .

What a guy , what a company .

I am so glad that deVere Group is working with Goldman Sachs , it’s going to be amazing

https://www.devere-group.com/news/deVere-Group-Goldman-Sachs-Fund-Advisors.aspx

Tony Evans
Tokyo Japan

Picture was taken as screenshot off Berg.

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Yen strengthens – G20 turns on Kuroda ,North Korea next ?

12031067-set-of-ignited-bombs-with-currency-symbols-and-explosion

What a week ,the Yen was like a see-saw , up up up down !! In the end the yen maintained an advance from the end of last week before a Group of 20 meeting where Japan may face criticism over stimulus efforts that have weakened the currency, I do chuckle that the G20 are saying this , as the FEB , ECB and BOE have been doing this for years ! But Japan is doing it to boost inflation .

Japan’s currency touched a one-week high, having slumped to the lowest level in four years on April 11 at just short of 100 per dollar, I was so unhappy at this as I had a position on it touching a 100 ! Its not if it touches 100 but when . After the U.S. Treasury Department said April 12 it would put pressure on Japan to refrain from competitive devaluation. Bank of Japan (8301) Governor Haruhiko Kuroda gives two speeches today, after surprising markets on April 4 by doubling monthly bond purchases, seeking to end 15 years of deflation.

Governor Haruhiko Kuroda has his vision and is adamant he will achieve it . But the BLACK SWAN is North Korea , today there will be a missile launch and as such fear will kick in and yen will strengthen .

As I type this I am listening to John Kerry United States Secretary of State and I am pleased to hear he is encouraging talks but also stating we will not be bullied , strength not appeasement .

Monday is such a great start to the week , it has the promise of all possibilities in the week ahead .

Lock and load ( not the best phrase in the current climate I know !)

Tony Evans

Re Blog Nigel Green – Bold move by Japan

Great post by our CEO talking about Japan ,
Abenomics there will be winners and loosers ,
Problem now is the “silver savers ” they have seen their income buying power increase over the last 20 years , if they start being a problem this could all be for nothing !

They control $7trillion ! In personal assets ,

Tony Evans

Nigel Green – Bold move by Japan

Having spent 20 years in the economic doldrums Japans new Prime Minister has attacked the stagnate economy with massive QE. The Bank of Japan is preparing to boost its balance sheet to 60 per cent of GDP by next year. In ther words its printing extra money to the equivalent of Turkey . Its a massive boast to the Japanese economy and think ultimately to the World economy. The US is picking up nicely, China is doing well, all it needs now is a European reaction. So far the only reaction from Europe is the European Central Bank primed the markets for a possible cut in interest rates to 0.5 per cent as soon as next month.

The massive QE in Japan caused the yen spiralled downwards as Haruhiko Kuroda, the new Governor of the Bank of Japan, used his first policy meeting to jettison the ultracautious approach championed by his predecessor and announce a doubling of his balance sheet in an explicit attempt to hit a 2 per cent inflation target.
The Bank of Japan’s radicalism surpassed analysts’ expectations: it is preparing to boost its balance sheet to 60 per cent of GDP by next year as it gobbles up government bonds and other assets.
Investors should consider more exposure as the World economies start recovery, and limit exposure to Govt Bonds. At some point interest rates will raise and when they do expect a massive fall in bond values.
Nigel Green deVere Group

Kuroda Stuns the market – Bank of Japan Boosts Bond Purchases

Bank of Japan (8301) Governor Haruhiko Kuroda 1 – 0 Deflation

Good Job Kuroda you promised the world and you delivered , this a Central Bank Governor that now has the confidence of the market and the world .

The central bank buy 7 trillion yen ($74.6 billion) of bonds a month!!! THAT BIGGER THAN Switzerland GDP PER YEAR !!!!!!!

Yen weakens against the $ – 94.122 AND THE NIKKEI turned A -1.5% LOSS to a 0.5% gain.

Watch this space Japan has declared war on deflation !!

BBC

Bloomberg

Japan’s Nikkei Posts Best Back-to-Back Quarter Since 1972

Could this be a start of another Japanese boom ?

Looking at the graph below you can see last time the Nikkei went up by a factor of 8!!
Garph link

Sentiment has changed here over the coming months in my 8 year time here I have never seen it so positive!

Abenomics is the key , lets make sure he keeps up the good work .

Tony Evans

Japan’s Nikkei 225 Stock Average (NKY) rose today, capping its best back-to-back quarterly performance since 1972, on optimism policy makers will stimulate the economy and as U.S. data boosted optimism about global growth.
The Nikkei 225 rose 0.5 percent to 12,397.91 at the close of trading in Tokyo. The measure closed 19 percent higher this quarter, extending the 17 percent increase in the previous quarter. That’s the best two-quarter performance since December 1972, when the measure rose 37 percent.

Japan’s Nikkei Posts Best Back-to-Back Quarter Since 1972

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Re blogging “Mr Yen cautions on Japan’s ‘unsafe’ debt trajectory”

A great article in the Telegraph on the Yen , Abenomics and debt ,
Looking at Japan is self financing its debt bit for how long ? Abenomics makes JGB looks very interactive , negative yield 1%!

2008 financial crash made many people remember that borrowed money has to be paid ,

In my opinion they will tax , tax , tax ! Which history shows us it never never works , I believe increase the consumption TAX to 10% is a much better option , and then invest in projects to keep Japan in Competitive position .
Japan should stick to its strengths and invest in R&D and engineering .

As always the markets will decide .

Tony Evans

Mr Yen cautions on Japan’s ‘unsafe’ debt trajectory

By Ambrose Evans-Pritchard, in Tokyo4:04PM GMT 26 Mar 2013

“A debt ratio of 245pc of GDP is not really safe, and it is not happening because we are investing,” said Takehiko Nakao, Japan’s ‘Mr Yen’ or vice finance minister in charge of the exchange rate.
Mr Nakao said the scope for further fiscal stimulus is running out and the country must restore public finances to a sustainable path by the middle of the decade. “We can’t continue to expect people to lend money to us,” he told The Daily Telegraph.

The comments touch on an acutely sensitive topic. A number of global hedge funds and banks have begun “shorting” Japan’s debt, the world’s biggest at $23 trillion.
They are mostly taking positions through the credit default swap (CDS) market, betting that Japan will be the next big crisis theme after the US subprime crash and the eurozone debt debacle. The radical new government of premier Shinzo Premier is determined to prove them wrong.

Mr Nakao brushed aside criticism that Japan is engaged in currency war or trying to push down the yen, but acknowledged that there are limits to what the Bank of Japan (BoJ) can do under the rules of global finance.

“We didn’t blame other countries after the Lehman crisis when they had large falls in their currencies. We are using monetary policy to tackle persistent deflation in Japan, and avoid a deflationary spiral,” he said.

Mr Nakao said there is a “shared view” among the developed countries that central banks can legitimately buy any form of domestic asset – as the Bank of England and the US Federal Reserve have been doing – but overseas bonds are another matter.
“We cannot buy foreign assets at our leisure. That would be the equivalent of currency intervention by the Bank of Japan,” he said.

The world turned a blind eye to Japan’s purchases of US Treasuries in 2011 after the Fukushima disaster, when the yen surged to a record Y76 against the dollar. But those were unique circumstances.
The yen has since weakened dramatically to around Y95 under Mr Abe, whose “Abenomics” stimulus policies include a shake-up at the BoJ and a new team of governors committed to reflation.

Veteran Japan-watchers say there is a graveyard full of foreign funds that bet against Japanese debt over the last two decades, only to learn the hard way that the country is sui generis, with vast overseas assets and a captive pool of domestic savings.

The great unknown is whether this is now changing as Japan’s trade surplus evaporates. The International Monetary Fund says gross public debt will reach 245pc of GDP this year. Net debt – stripping out the BoJ’s liquid assets – is much lower but it too is now rising fast.

The IMF says net debt will reach 145pc in 2013, well above the usual safety threshold. Figure has jumped by 50 percentage points since 2008, roughly the same as the jump in Spain and Portugal over the same period.
Japan is the only major nation that has not begun to tighten fiscal policy. The IMF says the primary budget deficit was 9pc of GDP last year, yet the Abe government is launching a fresh $200bn blast of stimulus worth 2pc of GDP to kick-start recovery.

Mr Nakao plan is to withdraw the stimulus gradually once recovery gains traction, with a rise in VAT from 5pc to 8pc next year, and then to 15pc. Mr Abe has vowed to cut the primary deficit to 3pc by 2015. “We think that is unrealistic,” said Junko Nishioka from RBS.
Chisato Haguma, chief equity strategist at Mitsubishi UFJ, said the government must curb “exploding social security outlays” as Japan’s ageing crisis hits.
However, he said the high debt level is overstated since the vast assets of the state – including land – dwarf liabilities, and could be sold off if needed. “They have more options than assumed. There is not going to be a fiscal crisis in the next two to three years, but there could be one later,” he said.

Foreign hedge funds have made much of recent moves by the state pension fund GPIF to start selling off part of its vast holding of government bonds (JGBs).
Mr Nakao said the selling is a temporary blip caused by bulge of retiring baby-boomers. The GPIF will soon be a net buyer again and will continue to accumulate for another thirty years.
The IMF has warned repeatedly that Japan is pushing its luck. The Fund has advised fiscal tightening of 10pc of GDP by 2020 just to stabilise the debt level.

It said there is plenty of “low-hanging fruit”, advising Tokyo to raise the retirement age from 65 to 67, and remove the tax subsidy for dependent spouses to make it worthwhile for women to continue working.
Yet the Fund said Japan is uncomfortably close to a debt compound trap, and could face trouble if borrowing costs ratchet up. “Even a moderate rise in yields would leave the fiscal position extremely vulnerable,” it said, warning that this would have implications for the entire world.
“Even a relatively small increase in the sovereign risk premium would make fiscal consolidation more difficult, pose challenges to financial institutions, harm growth prospects in Japan, and could spill over to global risk premia and growth. In this regard, Europe’s recent experience offers a cautionary tale. Once market confidence is lost, regaining it becomes very difficult.”

Japanese Economy Gives Investors A Yen For Risk

A great article on iExpats on the JPY and how Abenomics is changing Japanese mentally and the world attitude to risk in Japan .

A very good read.

Japanese Economy Gives Investors A Yen For Risk
By Lisa Smith March 22, 2013

A number of different factors have joined together to encourage investors to ditch safe assets and head for riskier investments.

Many professional investors are heading towards Japanese equities because of the country’s weak yen which helps boost exports and increasing confidence among Japanese companies.

Others are ditching Australian bonds and reducing their gold holdings.
The downward slide of the UK pound is also making British equities more attractive, particularly in those firms which trade in dollars or export in volume.
To underline this move, one major player, Baring Multi Asset Fund, has increased its equity exposure in Japan from zero at the end of last year to a current standing of 4% – and they are looking to invest more.

Flagging economy

Fund manager Andrew Cole said that the Japanese government’s manipulating of the yen was helping to boost the flagging economy and, as a result, the recovery in Japanese equities was sustainable.

He added: “The measures taken by the Bank of Japan appear to be more credible than anything we have seen in the past and, as such, we believe Japanese equities are set to provide good opportunities for investors.”

Mr Cole says gold exposure has been reduced and will need an unorthodox fiscal intervention in the US for the price to keep rising.

The fund is also slashing the proportion of assets which are hedged in Sterling from 79% last autumn to 68% in the first quarter of this year.

They are also selling Australian bonds as government debt in safe havens comes under pressure and investors move to riskier profiles against what is seen as an expensive asset class.

The outlook of Barings is underlined by a Credit Suisse report which highlights two reasons as to why investors are adopting a riskier stance for their investments.

Stops and starts

The first, they say, is that economic growth in the US will pick up this year and lead the global recovery and, secondly, that the world’s central banks will raise interest rates this year as they leave their stimulus measures behind them.

However, they warn that the markets will fluctuate dependent on economic data being published but that the swings will be pauses rather than peaks and troughs and that the markets will continue their upturn.

Economists at Credit Suisse are predicting an up-coming slowdown in the world economy but this will not be followed by a sharp decline in growth and that the market’s mood of optimism could be undermined leading to short term falls.

The firm also points to the Japanese economy enjoying a strong rebound this year with better growth figures for both China and Europe.

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