Posts Tagged ‘ yen ’

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 ?

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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

Yen Drops to Lowest Since June 2009 !!

What a cracking start to a Monday , Market Booming and Yen dropping .

The yen dropped to the weakest level since June 2009 as investors sold the currency amid concern measures to fight deflation. Also a lot of the companies now are re setting the hedging they have .

The yen was little changed after finance ministry data showed Japan’s current account surplus, the widest measure of trade, was larger than economists forecast

Lets enjoy this rally , Japan has waited for so long for this , may it last long .

Yen Rates :
$- 98.85
Euro -128.44
£ – 151.2
AUD – 102.086

Tony Evans ,

Bloomberg li

BOOMING BOOMINGJapan’s Nikkei in best shape since 2008

Japan market is BOOMING !
I can feel a massive end to the year , my prediction of over 13,500 was thought of as crazy by many , today I have a big smile , lucky I am not one of those guys that will say I told you you so but I told you so !

Ride the highs and sell the lows ,

Tony Evans

Japan's Nikkei in best shape since 2008.

Japan’s Nikkei in best shape since 2008

The Japanese stock market hit its highest level in almost five years on Friday, after the Bank of Japan ambitious stimulus plan raised hope of economic revival, after years of slow growth.

The main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62 earlier today – its highest since August 2008. By the end of the trading day, the Nikkei closed up 1.58%.

Meanwhile, the Bank of Japan said on Thursday that it plans to double the country’s money supply in an attempt to spur growth and stop prices from falling. The news took investors by surprise as it was a much bigger step than expected and therefore signalled a more aggressive approach towards accelerating economic growth.

Analysts praised BoJ Governor Haruhiko Kuroda’s bold moves for his understanding of how global markets and investors would react when it comes to monetary policy.

The so-called Abenomics, Prime Minister Shinzo Abe’s economic policies, have drawn attention of investors who were not previously interest in Japan, according to Economists.

By pumping more money into the system, Japan is hoping to promote price growth, ending a cycle of deflation, recession and sputtering economic recovery. Concurrently, it is also hopes to weaken its currency in order to boost exports.

Notably, in the past two days alone, the Japanese yen declined 4.5% against the US dollar and more than 5% against the Euro.

Yen Rises to Near Four-Week High on Safety Demand

The yen strengthened to a level not seen in four weeks against the dollar after U.S. manufacturing expanded less than forecast.The Federal Reserve looks less likely in reducing the bond buying program .

This is a great time for people with YEN to convert to other currencies as I can’t see this lasting.
I can see the yen wekening again based 2 events :

Bank of Japan Meeting

The new Bank of Japan Governor Haruhiko Kuroda will be holding his first meeting on April 3-4,
He is committed to the 2% and has said he will take all actions needed.

ECB Meeing

ECB President Mario Draghi and the committee will have the monthly meeting on April 4th,
With unemployment in the EU rising to record high. Something’s needs to be done here , and I think again it will be down to Super Mario to do something .

Lets watch the space and see what happens , all we know is volatility is a guaranteed , all you got to do is be on the right side of the trade !

Tony Evans

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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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“Abenomics ” the winners & loosers

for every action there is always an equal and opposite reaction

Newton said that in 1687 and I can say that that is true today of the effect of “Abenomics” .Don’t get me wrong it’s exactly what Japan needs to kick start its economy but this will effect Japan’s biggest and also faster growing demography the “retired or silver saver as they known here ”

To understand this you need to understand inflation & deflation :
•inflation – increase in prices ( money has less purchasing power”
•deflation -prices fall ( money has more purchasing power )

So in a deflation environment which Japan has been for in the last 20 years “cash was king ” elderly saw their income power increase every year , with Abenomics this would end and this purchasing power would fall . The retired in Japan have assets in excess of $7 trillion ( that’s nearly as much as the GDP of UK ,Germany & half of France !)

The winners will be the stock market , forex and in the Japan Economy .The losers will the retires and people on fixed income ,

Personally I hope Abenomics will succeed Japan needs it, but it all comes down the “silver savers” will they allow it?

No one is bigger than the market forces , but the silver savers is quiet a force,

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Bank of Japan ready to declare war on deflation ???

Is the Bank of Japan ready to declare war on deflation ? I believe so , Kuroda said last week he would take aggressive action to stop deflation and to increase the growth of the economy .
I personally believe he will look at around $1billion a DAY ! At the moment the BOJ has plans for $1billion every 2 days starting next year ,
His comments last week gave us the impression he wants action now rather than later !

“It would be natural for the BOJ to buy longer-dated government bonds in huge amounts,” Kuroda said in a confirmation hearing in parliament .

I personally see no real change until the up and coming election has been won by Prime Minister Abe . Reason for this is that Japan have been sheltered from high energy price , commodity and food price and residents in JAPAN haven’t seen their bills increase as most other G8 countries .Weaker Yen means higher prices for consumer ( voters ) and that means no votes !

Kuroda has still not been confirmed as the new Bank of Japan governor but the markets have already taken this as a given , Nikkei goes up 2+/-% in a day.
A 1% increase means the Nikkei adds around $23billion !!!

I see Abe drawing up a battle plan for war , at the moment he is just appointing his “generals” , summer time I can see the full war!

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The Yen – Currency War or just Growth ?

Prime Minister Abe has survived a meeting with US President Obama without having his policy criticised. ‘Abenomics’ is seen in Japan as a way of growing the economy not devaluing the currency, if the Yen weakens that’s a bi product. Prime Minister Abe appointed key people to lead the Bank of Japan Kuroda-sama as Governor, a person liked in Japan but also respected internationally, which is key if Japan is going to succeed.
The Yen has fluctuated at times quite widely between 90-95 Yen range over 5% swings.
Now it seems so much sentiment has been placed on ‘Abenomics’ what’s going to happen next??
At least now we have a clear plan for getting out of deflation environment and into a true inflation target.
On the other hand we have no evidence of structural change to accommodate this. Personally I still feel people are remembering the BOOM and aftermath of the last surge and slightly cautious from jumping in.
But I do feel there has been a huge shift in people minds and the attitude is ‘What if this all true? Can Japan go through another BOOM?

Let’s hope so, I look forward to seeing what happens .
Gambette Kudasai

Tags :#abenomics #abe #yen #japan

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