Loading…
Loading…
Japanese retail investors are betting that recent gains in the yen will be short-lived, maintaining significant short positions that could increase volatility in currency markets.
Most respondents expect the BOJ to hike this week by 25 basis points, citing higher inflation, higher wages, and pressure from the U.S. government. A hike would signal an acceleration of the tightening cycle, faster than the six-month interval the Bank has been following.
Asian stocks diverged on Tuesday as South Korea's KOSPI struggled to shake off pressure on semiconductor shares while Japan's Nikkei 225 recovered, leaving the region's two most AI-sensitive markets moving in opposite directions ahead of key US and Japanese rate decisions. The KOSPI fell as much as 0.76% in early Seoul trading before paring most of the decline, extending a difficult stretch after Monday's sharp technology sell-off.
The artificial intelligence (AI) and semiconductor trades are garnering plenty of limelight this year and when investors evaluate those themes relating to ex-US equities, their attention largely shifts to China, South Korea and Taiwan. However, there's another Asia-Pacific dynamo on the AI front, and it's a familiar one: Japan.
South Korea's KOSPI and Japan's Nikkei 225 led a broad Asian selloff on Friday as oil surged above $108 a barrel and US bond yields moved dangerously close to 5%, reviving concerns that inflation could force central banks to tighten further. The KOSPI dropped more than 2.5%, extending Thursday's weakness, while the Nikkei 225 tumbled about 2.8%.
Japan's record reserve drain is reshaping the yen outlook, spotlighting four ETFs offering large-cap, hedged and small-cap exposure.
Our global markets watchlist tracks nine prominent indexes from economies around the world.
Mahjabeen Zaman from ANZ Bank thinks the BOJ will hike rates by 25 bps in its upcoming meeting, but it will be difficult for the BOJ to be more hawkish than other central banks due to fiscal difficulties, which might be disappointing to people who want the yen to strengthen more.