BOJ, Japan, U.S. discussed on Bloomberg Daybreak Asia

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Yeah, 75 bps is certainly been priced in by the market. And at this moment in time, if you look at the U.S. ten year yield, it is at three and a half percent. And at this moment, it seems that it is at a resistance level. So 3.5 could be overshooting to 3.7. But this seems to be likely to be anchoring around these levels. So two ideas that we have for our investors. So one of them is DM IG corporate bonds because they're using more than 5% and if you look at how much they've been using over the last 78 years, been like two and a half percent. So this is very attractive yield. You do need some defensive exposure. You do need to have some income carry to be able to combat markets like these. The other idea is high dividend equities globally. Because if you look at times when U.S. CPI is above 3%, global high dividend equities outperformed global equities by about 6%. They actually had an absolute return of about 4% positive versus global equities down 2% in those periods. When do you expect that we could see a fed pivot and what will perform well in such an outcome? Well, given the latest CPI print, that fed pivot has been pushed, I guess, pushed back into the future. So we probably need to see a couple more prints that are below expectations for this pivot narrative to return. If that is the case, that the higher growth stocks will probably do very well in those environments because you expecting that the use would be coming off. And that would help the valuation of those growth stocks. All right, let's talk about Asia. Now we did have that hot inflation read from Japan. Is it hot enough to move the dial though when it comes to the bank of Japan? Probably not. Think Japan has Japan really has a chronic this inflation issue. So they probably need to see a few like this before that bank BOJ consider possibly scaling back on the outer loose policy. So the total yen is probably here to stay. Around these levels. And we saw such big moves in dollar yen and JGB futures last week as well. The three and a half percent treasury rate as well, how much does that kind of potentially have an impact on the BOJ decision when we're looking at this year differential? Well, I think at this moment in time, the Japan economy do need such weakness in the yen. Because it does help the exporters, they are trying to boost up the tourism again. So of course, I think they would let the yen stay around these levels. I think unless they go above one 50, they wouldn't be doing anything concrete. A lot of this, as we know, with what's happening in dollar yen is happening in EM currencies because of the strength of the dollar as well. We mentioned earlier waiting to see what the PBOC fixes today. How much of a guess is a stress that we could see 7.25 now? I'll send 1.25. I think that's certainly a possibility because you do have the property issues looming at the Chinese economy. And there are still a few weeks before the before the Congress at the end of October. So until then, I think big

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