Japan

Strategy

Up the stairs, down the elevator

During times of uncertainty investors tend to gravitate toward the Japanese yen. This makes the yen a good tail hedge within a portfolio context, as the yen will appreciate when you need it the most.

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Strategy

Kabuki and Super Mario

There doesn’t seem to be much interest in Japanese investment ideas by foreigners, which makes me wonder whether we are collectively missing a trick. Whether you consider culture, technology, economics or social developments, Japan remains quite different from the western perception of what is mainstream. This makes it an interesting part of the investment universe as it could provide idiosyncratic, diversifying investment opportunities.

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Economics

China hard landing risk - What can we learn from Japan?

This is the fourth and last in a series of blogs that looks at the risk of a hard landing in the Chinese economy. One problem when assessing this risk is the lack of historical precedents. Very few countries underwent debt build-ups of Chinese proportions, and those that did were usually very small, open economies. The one exception is 1990 Japan which displays some striking similarities with today’s China.

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Economics

Tremors, tensions and typhoons

The second part of my Asia macro tour swung by Tokyo where in a similar set of meetings I witnessed an even greater sense of belief in the status quo. The impression was that the situation is currently fine, so why make unpopular changes?

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Economics

Champions League clique

The rise of Chelsea and Man City shows that it takes a lot of money to break into the Champions League elite, but once you're there, it creates a virtuous circle. The same is true for inflation. There is a self-reinforcing loop of high inflation expectations, wages and prices. But the 2014 oil shock looks to have knocked the US and Japan out. Consumers' inflation expectations remain stubbornly low.

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Strategy

A postcard from Tokyo

Japan is a fascinating country. Its culture, people and cuisine are just as intriguing as its unconventional policies. Here are my key takeaways from a week of meeting policymakers, academics, investors and analysts.

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Strategy

When the satnav’s broken, dust off your roadmap

Monetary policymakers are often described as heading into “uncharted territory”. The latest example is the Bank of Japan’s decision to introduce a target for ten-year yields. You won’t find a precedent of this policy in recent history. But the territory is not totally uncharted: we saw something very similar in the USA roughly seventy years ago.

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