The Japanese yen (JPY) is still “relatively” strong, but it has weakened by a pretty significant amount against the US$, nearly 10 points, in recent weeks. With much buzz of yen intervention leading up to the recent softness, one would have thought the MoF ran out of patience and intervened. Well, in fact, it kind [...]
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RSS feed for this sectionThoughts on Nakagawa and on investing in Japan
Former Japanese Finance Minister Nakagawa should never have been at the press conference that did in his career, and now has the Japanese press gone mad discussing “reputation risk.” It is disturbing that he was even allowed near the table. Equally troubling is how BoJ Governor Shirakawa didn’t preempt some questions, especially the one’s directed [...]
Japanese stocks ‘fairly’ undervalued
The author’s intent is not to be misleading, but rather to be as frank as possible, regarding the longstanding debate of whether or not Japanese stocks are truly undervalued. In short, the answer is no. I no longer believe Japanese stocks are undervalued, not to the extent that I once did, and not to the [...]
Bank of Japan caves in again
I don’t agree with the BoJ’s decision to cut from 0.3% –> 0.1%. The cost of borrowing is not the problem here. In fact, the impetus to cut was at least partially pressure from the MoF, in what amounts to a silly attempt to ease yen-strength. The reaction has been muted, and for now, the [...]
Gains unsurprisingly erased in Tokyo; patient buyers needed
Japanese stocks “rallied” a spectacular 14% last Tuesday, but in spite of that (and being surrounded by massive days of selling), I lacked the broader market’s bullish conviction and explained why in “Trying not to rain on the Tokyo stock parade.” Overnight, the Nikkei sold-off about 6.8% to fall back below 9,000 again to 8,674, [...]
Implications of a “Strong” Yen Revisited
One argument against the negative bias (for Japanese companies) of a strong yen goes something like this: a stronger yen reduces the impact of high commodity prices, such as oil, which particularly helps the likes of consumers and smaller companies. I said as much, stating the obvious, last November (see here). At that time, Chief [...]
Is a Nikkei 225 Bottom Near?
The Nikkei 225 has been a marked laggard compared to regional and global benchmarks over the past year. To make matters worse, the Nikkei fails to sustain rallies and faces ongoing sell pressure resulting in new multi-year lows of late (now at 2 years and 7 months). As of Friday’s (3/14) close of 12,241, the [...]
Dodge & Cox Hedging International Stock Fund (DODFX)
Dodge & Cox doesn’t comment on the yen — although a trio of its picks (Sony, Hitachi and Matsushita) largely helped it beat the MSCI EAFE-Japan — but says the following on its Dodge & Cox International Stock Fund [[DODFX]] fact sheet for the quarter-ended Dec. 31, 2007: As certain currencies have risen relative to [...]
Implications of a Strong Yen
In a Wednesday article entitled, “Strong Yen Weakens Export Pillar,” The Wall Street Journal quotes Japan’s chief cabinet secretary Nobutaka Machimura, who on Monday commented that it is “wrong to think that a high yen is something bad for the Japanese economy.” One obvious benefit is a stronger yen reduces the impact of high commodity [...]
The Yen Carry Trade Explained
The yen carry trade is once again a hot topic in financial news, as the U.S. subprime induced liquidity crunch has rapidly spread fear of a collapse in bond and credit markets across the globe. Similar to the market turmoil this past late-February and early-March, Japanese equities have taken the worst beating with the Nikkei [...]
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